The Federal Government has introduced stricter payroll verification measures for newly recruited public servants as its personnel expenditure climbed to ₦1.96tn in the first quarter of 2026, surpassing capital expenditure and raising concerns over the country’s spending priorities.
The new directive, announced by the Office of the Accountant-General of the Federation (OAGF), requires newly recruited employees to undergo comprehensive verification before they can be enrolled on the Integrated Personnel and Payroll Information System (IPPIS).
The development comes amid mounting fiscal pressures, with rising recurrent expenditure, debt-servicing obligations and revenue shortfalls limiting the government’s financial capacity to fund infrastructure and other development projects.
An analysis of the Federal Government’s first-quarter budget implementation reports for 2025 and 2026 showed that personnel expenditure increased by ₦133.94bn, or 7.35 per cent, from approximately ₦1.82tn in the corresponding period of 2025.
The PUNCH report, which detailed the figures, noted that the Federal Government spent ₦1.96tn on personnel costs between January and March 2026, compared with ₦1.69tn on capital expenditure.
The difference meant personnel spending exceeded capital expenditure by approximately ₦267bn, highlighting the growing weight of salary obligations in the government’s expenditure profile.
In a statement issued on Monday and signed by the OAGF’s Director of Press and Public Relations, Bawa Mokwa, the government said the new verification requirements would take immediate effect and apply to ongoing and subsequent payroll admission processes.
The office stated that no newly recruited employee would be admitted into the federal payroll without first being captured on the nominal roll of the relevant ministry, department or agency (MDA) and meeting all prescribed eligibility and validation requirements.
Under the revised process, MDAs seeking payroll admission for newly recruited personnel must submit formal requests supported by recruitment approvals, appointment letters, applicable waivers and other relevant documentation.
The verification exercise will cover salary structures, grade levels, salary steps, allowances and other financial entitlements to establish the legitimacy of appointments and ensure accurate payroll calculations.
Employee records will also be checked against statutory information, including Pension Fund Administrator details, pension identification numbers, National Housing Fund registration and tax records.
Following the initial checks, the documents will be forwarded to the relevant MDA for confirmation and endorsement by the Accounting Officer, Director of Human Resources, Director of Finance and Accounts, and designated Payroll Validating Officer.
The records will subsequently be returned to the OAGF for final processing.
The government said final admission into the federal payroll would depend on satisfactory completion of the verification procedures and approval by the Accountant-General of the Federation.
It warned that incomplete documentation or unresolved discrepancies could delay payroll admission, adding that officials responsible for processing and approving payroll enrolments would be held accountable for violations of applicable rules.
Permanent Secretaries, heads of agencies and other relevant officials have been directed to ensure strict compliance.
The latest expenditure figures show that personnel costs are consuming an increasing share of federal resources at a time when capital budget implementation remains significantly below expectations.
According to the budget implementation report, personnel expenditure by MDAs rose from approximately ₦1.57tn in the first quarter of 2025 to ₦1.70tn in the corresponding period of 2026.
The increase represented ₦133.94bn, or 8.54 per cent.
Personnel expenditure by Government-Owned Enterprises remained unchanged at ₦254.35bn, indicating that the reported increase in the wage bill came from MDAs.
On a monthly basis, the Federal Government spent an average of ₦652.37bn on personnel costs during the first quarter of 2026, compared with ₦607.73bn in the same period of the previous year.
Despite the increase, actual personnel spending remained below the quarterly budget projection.
The 2026 budget allocated ₦8.35tn for MDA personnel costs, compared with ₦7.60tn in 2025, representing an increase of approximately ₦758.51bn, or 9.99 per cent.
The Budget Office said actual personnel expenditure by MDAs stood at ₦1.70tn in the first quarter, ₦385.78bn below the prorated quarterly projection of ₦2.09tn.
Capital expenditure performance was considerably weaker.
Total capital expenditure stood at ₦1.69tn, against a prorated quarterly projection of ₦8.07tn, leaving a shortfall of ₦6.38tn, or 79.06 per cent.
More significantly, no funds were released for the implementation of MDAs’ 2026 capital budget during the quarter, despite a prorated allocation of ₦3.92tn.
The Budget Office attributed the situation to the continued utilisation of funds released under the 2025 capital budget, whose implementation period had been extended to December 31, 2026.
Consequently, implementation of the 2026 MDA capital budget remained at zero as of March 31, although capital expenditure was recorded under other components.
Government-Owned Enterprises accounted for ₦740.32bn in capital expenditure, while Tertiary Education Trust Fund spending reached ₦393.56bn.
Multilateral and bilateral project-tied loans contributed ₦287.44bn, while grants and donor-funded projects accounted for ₦249.50bn.
The growing personnel bill coincided with weak revenue performance, further complicating the government’s fiscal position.
The Federal Government generated approximately ₦5.08tn in revenue during the first quarter of 2026, against a target of ₦9.22tn, representing a shortfall of 44.93 per cent.
Personnel expenditure alone was equivalent to 38.56 per cent of actual revenue during the period, compared with approximately 36.80 per cent in the corresponding period of 2025.
In practical terms, the government spent an amount equivalent to nearly ₦39 out of every ₦100 it generated on personnel costs.
Debt-servicing payments reached ₦4.63tn, equivalent to approximately 91.18 per cent of actual revenue.
Combined personnel costs and debt-service obligations amounted to ₦6.58tn, exceeding actual government revenue by approximately ₦1.51tn.
The Federal Government recorded a fiscal deficit of ₦4.69tn during the quarter.
Meanwhile, non-debt recurrent expenditure increased from ₦2.24tn in the first quarter of 2025 to ₦2.77tn in the corresponding period of 2026, an increase of approximately ₦523.49bn.
Personnel costs accounted for 70.73 per cent of non-debt recurrent expenditure.
Pensions and gratuities, including service-wide pensions, also rose sharply from ₦161.60bn to ₦330.72bn, representing an increase of ₦169.12bn, or 104.65 per cent.
When pensions and gratuities were combined with personnel costs, the government’s expenditure on these obligations reached ₦2.29tn, compared with ₦1.98tn in the first quarter of 2025.
However, pensions and gratuities are classified separately from personnel costs in the budget implementation reports.
The Federal Government’s personnel spending outlook could face additional pressure following the approval of a monthly transport allowance of ₦70,000 for public servants beginning in November.
The allowance followed a conciliation meeting with the Nigeria Labour Congress in Abuja and is expected to run for six months.
Although the agreement covers workers across all levels, the number of beneficiaries and the total budgetary cost of the intervention were not specified.
The PUNCH estimated that the six-month transport allowance could cost approximately ₦465.7bn if all 1.1 million employee records on the federal payroll system qualified for the payment.
The Trade Union Congress, however, rejected the transport allowance, demanding an immediate salary increase for workers and implementation of outstanding agreements with health workers under the Joint Health Sector Unions.
Economists have also called for sustainable measures to reduce commuting expenses and ease the financial burden on households.
Reacting to the figures, economist and public affairs analyst Dr Aliyu Ilias, Chief Executive Officer of CSA Advisory, expressed concern that personnel expenditure had overtaken capital spending.
He warned that the trend could undermine investments in critical infrastructure, including education, healthcare and transportation.
Ilias argued that the expenditure pattern raised questions about the government’s fiscal priorities, particularly as salary obligations and debt servicing continued to absorb resources needed for development.
He acknowledged that salary payments and debt servicing were essential obligations, especially amid declining purchasing power and pressure on workers’ disposable income.
However, he maintained that the government needed stronger fiscal discipline and improved budget accountability.
Ilias also criticised repeated extensions of budget implementation periods, arguing that the practice could weaken transparency and clarity in public expenditure.
He urged the National Assembly to strengthen oversight of budget implementation and demand explanations regarding government spending decisions.
Financial policy expert and Chief Executive Officer of CFG Advisory, Dr Tilewa Adebajo, also warned that Nigeria’s fiscal position was coming under severe pressure.
Adebajo said the country’s rising recurrent obligations and debt-servicing costs were restricting the resources available for productive investments.
He stressed that macroeconomic reforms alone would not translate into improved living standards without stronger economic growth, increased productivity, private sector investment and export diversification.
According to him, sustained underfunding of capital projects could weaken the benefits of economic stabilisation, as infrastructure investment remains critical to expanding productive capacity.
He called for a stronger economic growth strategy, fiscal discipline and policies aimed at improving household welfare.
Adebajo also raised concerns about government borrowing plans and public expenditure transparency, urging closer scrutiny of compliance with fiscal regulations.
The latest payroll verification directive forms part of the Federal Government’s broader efforts to contain recurrent expenditure and improve payroll management.
The Budget Office said restrictions on unapproved recruitment remained among the measures being pursued to control spending growth.
It also stated that recruitment and payroll enrolment requests must first obtain clearance from the Budget Office, while efforts to expand IPPIS coverage across federal establishments were continuing.
The stricter validation process is expected to strengthen checks on new appointments, improve personnel records and help prevent irregular payroll admissions.
However, the wider fiscal challenge extends beyond payroll verification.
With personnel costs rising, revenue collections falling below projections and debt servicing consuming a substantial share of government income, the balance between recurrent spending and development investment remains a major concern.
For the Federal Government, improving payroll integrity while ensuring adequate funding for infrastructure and essential public services will remain central to efforts to strengthen public finances and support sustainable economic growth.
