Nine States Cut Wage Bills Despite Higher Allocations

Despite a surge in revenue from the Federation Account Allocation Committee (FAAC), at least nine states in Nigeria reduced their wage bills during the first half of 2024, according to findings by Saturday Punch.

Following the removal of the fuel subsidy in May 2023, revenues to federal, state, and local governments have significantly increased. While some states witnessed a 50 percent rise in their allocations, others saw as much as a 100 percent increase.

However, despite these increased allocations, an analysis by Saturday Punch revealed that nine of the 35 states surveyed actually reduced their spending on salaries and wages in the first six months of 2024, compared to the same period in 2023.

This information is drawn from an examination of the 2023 and 2024 budget implementation reports of 35 states, obtained from Open Nigerian States, a BudgIT-supported platform that provides access to public budget data.

The data revealed that, despite receiving ₦1.54 trillion in FAAC revenue during the review period, these nine states slashed their wage bills by a total of ₦17.06 billion in 2024.

The states in question are Akwa Ibom, Anambra, Bauchi, Borno, Delta, Zamfara, Oyo, Ondo, and Kano.

In 2023, these states received a combined ₦838.49 billion from FAAC in the first half of the year, spending ₦199.71 billion on salaries and wages. In contrast, during the first half of 2024, despite receiving over ₦1.5 trillion in FAAC allocations, they reduced their wage expenditure to ₦182.65 billion.

Oyo State recorded the most significant wage reduction in Q2 2024, spending ₦32.66 billion on salaries, a decrease of ₦7.61 billion compared to the ₦40.27 billion spent during the same period in 2023.

Kano followed, cutting its wage bill by ₦3.77 billion, from ₦31.26 billion in 2023 to a lower figure in 2024.

The wage reductions in the other states were as follows:

• Akwa Ibom: ₦471.11 million,
• Anambra: ₦47.94 million,
• Bauchi: ₦689.99 million,
• Borno: ₦415.31 million,
• Delta: ₦1.24 billion,
• Zamfara: ₦1.49 billion,
• Ondo: ₦1.33 billion.

While there were no reports of significant layoffs or workforce reductions, it remains unclear why these states reduced their wage bills despite the rise in allocations.

Notably, findings also show that only 11 out of Nigeria’s 36 states are capable of independently covering their salary obligations without relying on federal allocations. These states, based on their approved 2024 budgets, include Lagos, Kano, Anambra, Edo, Enugu, Imo, Kaduna, Kwara, Osun, Ogun, and Zamfara.

This article is sourced from The Punch newspaper, with minor edits and adaptations by The Spectacles for clarity and readability.