FG Tightens Payroll Checks as Q1 Salaries Hit N1.96tn, Exceed Capital Spending

The Federal Government has tightened verification for newly recruited workers seeking admission into its payroll. Personnel costs rose by N133.94bn to N1.96tn in the first quarter of 2026, exceeding capital expenditure in the period.

The Office of the Accountant-General of the Federation announced the new measures on Monday in a statement signed by its Director of Press and Public Relations, Bawa Mokwa. The directive takes immediate effect and applies to all ongoing and subsequent payroll admission processes under the Integrated Personnel and Payroll Information System (IPPIS).

The OAGF said: "Henceforth, no newly recruited employee shall be enrolled without first being captured on the nominal roll of the relevant MDA and satisfying all prescribed validation and eligibility requirements."

Payroll gatekeeping

Federal budget implementation reports for 2025 and 2026 show personnel expenditure rose 7.35 per cent from N1.82tn in the first quarter of 2025. In the first quarter of 2026, the Federal Government spent N1.96tn on personnel costs between January and March, compared with N1.69tn on capital expenditure. Salaries and related obligations exceeded capital spending by about N267bn, or 15.77 per cent. Personnel expenditure was 20.05 per cent of total Federal Government expenditure of N9.76tn, while capital expenditure was 17.32 per cent.

Personnel costs for Ministries, Departments and Agencies rose from N1.57tn in the first quarter of 2025 to N1.70tn in the same period of 2026. That is an increase of N133.94bn, or 8.54 per cent. Personnel expenditure by Government-Owned Enterprises remained unchanged at N254.35bn, meaning the entire increase in the wage bill came from MDAs.

The Federal Government spent an average of N652.37bn monthly on personnel costs, compared with N607.73bn in the same period of 2025. Actual personnel spending was still below the quarterly budget projection. N8.35tn was allocated to MDAs' personnel costs in the 2026 budget, compared with N7.60tn in 2025, an increase of about N758.51bn, or 9.99 per cent. The report said: "The sum of N8.35tn was appropriated for MDAs Personnel Cost in the 2026 Budget. This translates to a prorated quarterly expenditure outlay of N2.09tn in 2026. Actual expenditure of N1.70tn was released in the first quarter of 2026, translating to N385.78bn (18.47 percent) below the quarterly projection for the year."

Capital spending lag

Total capital expenditure of N1.69tn fell short of the prorated quarterly projection of N8.07tn by N6.38tn, a shortfall of 79.06 per cent. No funds were released for MDAs' 2026 capital budget despite a prorated allocation of N3.92tn. The Budget Office said: "Funds for MDAs’ capital expenditure were not released in the first quarter of 2026 because some MDAs were still utilising funds released under the 2025 capital budget, whose implementation period had been extended to 31st December, 2026." Implementation of the 2026 MDAs' capital budget stood at zero as of March 31. GOEs accounted for N740.32bn in capital expenditure, TETFund spent N393.56bn, multilateral and bilateral project-tied loans contributed N287.44bn, and grants and donor-funded projects accounted for N249.50bn.

Non-debt recurrent expenditure increased from N2.24tn in the first quarter of 2025 to N2.77tn in the same period of 2026, a rise of about N523.49bn. Personnel costs accounted for 70.73 per cent of non-debt recurrent spending. Pensions and gratuities, including service-wide pensions, increased from N161.60bn to N330.72bn, a rise of N169.12bn, or 104.65 per cent. Pensions and gratuities combined with personnel costs reached N2.29tn, compared with N1.98tn in the first quarter of 2025. Pensions and gratuities are classified separately from personnel costs in the reports.

Revenue pressure

Revenue performance was weak. The Federal Government generated about N5.08tn in the first quarter of 2026 against a quarterly target of N9.22tn, a shortfall of 44.93 per cent. Personnel costs were equivalent to 38.56 per cent of actual revenue, compared with about 36.80 per cent in the same period of 2025. For every N100 received by the Federal Government in the quarter, an amount equivalent to nearly N39 was spent on personnel costs.

Debt-service payments reached N4.63tn, about 91.18 per cent of actual revenue. Combined personnel costs and debt service amounted to N6.58tn, exceeding government revenue by about N1.51tn. The Federal Government recorded a fiscal deficit of N4.69tn. The Budget Office acknowledged the need to contain recurrent spending and said restrictions on unapproved recruitment remained part of expenditure management.

The payroll checks may slow the wage bill, but the first-quarter numbers show personnel costs still outpace capital spending and consume a large share of revenue. That leaves less fiscal room for infrastructure and other capital projects, a key concern for businesses and consumers watching public spending and naira pressure.