FG To Spend ₦3 Trillion On New Minimum Wage, Pensions, Gratuities

The Federal Government of Nigeria is set to spend ₦3 trillion on the newly approved minimum wage and the payment of pensions and gratuities, as disclosed by the Minister of Budget and Economic Planning, Atiku Bagudu.

This announcement was made during a meeting with the Senate Committee on Appropriations, chaired by Olamilekan Adeola, on Friday.

Following a recent meeting between President Bola Tinubu and leaders of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), the president approved a new national minimum wage of ₦70,000 for Nigerian workers.

He also committed to reviewing the minimum wage law every three years.

The National Assembly had earlier passed an amendment to the 2024 budget, increasing its size by ₦6.2 trillion to ₦33.7 trillion.

President Tinubu requested the withdrawal of ₦3.2 trillion from the Consolidated Revenue Fund for capital expenditure and an additional ₦3 trillion for recurrent expenditure for the year ending December 31, 2024.

During the meeting with the Senate Committee on Appropriations, Bagudu presented the general principles of the newly amended 2024 budget. He emphasized that the additional budget would not be funded by loans but from reserved profits.

Bagudu detailed that priorities would be given to projects aimed at opening up roads for investments and handling emergencies, while other road projects would be tackled in subsequent phases.

He noted Nigeria’s historical underinvestment in infrastructure as a root cause of recent issues and praised President Tinubu for addressing the infrastructure deficit.

The Senate Leader, Opeyemi Bamidele, in his lead debate on the Appropriation Amendment Bill, explained that the amendment sought to authorize the issuance of ₦3.2 trillion for capital expenditure and ₦3 trillion for recurrent expenditure from the consolidated fund.

He highlighted that these funds would support capital infrastructure development, education, healthcare access, and public welfare initiatives.

Senator Adamu Aliero expressed support for the bills, underscoring the need to fund the expected minimum wage for workers.

Senator Adams Oshiomhole also emphasized the necessity of legally backing the increase in personnel expenditure to avoid financial shortfalls.

Bagudu assured that the Federal Executive Council would continue to approve funding for other road projects as funds become available.

He provided a sectoral overview of the ₦3.2 trillion allocated for the Renewed Hope Infrastructure Projects and the ₦3 trillion increase in the recurrent component of the budget.

Senator Adeola affirmed the government’s capacity to finance the 2024 budget and requested a detailed breakdown of the ₦6.2 trillion approval, which both chambers of the National Assembly will debate.

Senate Spokesperson, Senator Yemi Adaramodu, confirmed that ministries, departments, and agencies would defend their budget allocations before the relevant Senate committees.

The recurrent budget of ₦3 trillion will fund the new minimum wage, pensions, and gratuities, while the capital component of ₦3.2 trillion will support existing road projects on state and federal routes, including coastal roads, the Sokoto-Badagry road, railway construction, and dam irrigation.