FG Tightens Payroll Verification as Personnel Costs Hit N1.96tn in Q1 2026

The Federal Government has introduced stricter verification requirements for newly recruited workers seeking admission into its payroll, as personnel expenditure rose to N1.96tn in the first quarter of 2026.

The directive, announced on Monday by the Office of the Accountant-General of the Federation (OAGF), takes immediate effect and applies to all ongoing and future payroll admission processes under the Integrated Personnel and Payroll Information System (IPPIS).

In a statement signed by its Director of Press and Public Relations, Bawa Mokwa, the OAGF said newly recruited employees must first be captured on the nominal roll of their respective Ministries, Departments and Agencies (MDAs) and meet all prescribed validation and eligibility requirements before being enrolled.

The office stated, “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.”

The move comes amid rising pressure on public finances, with personnel expenditure increasing by N133.94bn, or 7.35 per cent, from N1.82tn recorded in the first quarter of 2025.

An analysis of the Federal Government’s first-quarter budget implementation reports for 2025 and 2026 showed that personnel costs reached N1.96tn between January and March 2026, exceeding capital expenditure of N1.69tn by about N267bn.

Personnel spending accounted for 20.05 per cent of the Federal Government’s total expenditure of N9.76tn during the period, compared with 17.32 per cent for capital expenditure.

A breakdown showed that personnel costs for MDAs rose from N1.57tn in the first quarter of 2025 to N1.70tn in the corresponding period of 2026, an increase of 8.54 per cent. Spending by Government-Owned Enterprises remained unchanged at N254.35bn.

The Federal Government spent an average of N652.37bn monthly on personnel costs during the quarter, up from N607.73bn in the same period of 2025.

Despite the increase, actual personnel expenditure remained below the quarterly budget projection. The Budget Office said N8.35tn was appropriated for MDA personnel costs in the 2026 budget, translating to a quarterly projection of N2.09tn. However, only N1.70tn was released in the first quarter, leaving a shortfall of N385.78bn, or 18.47 per cent.

Capital budget implementation was significantly weaker. Total capital expenditure stood at N1.69tn, falling short of the prorated quarterly projection of N8.07tn by N6.38tn, representing a 79.06 per cent shortfall.

The Budget Office disclosed that no funds were released for the implementation of MDAs’ 2026 capital budget during the quarter because some ministries and agencies were still using funds from the 2025 capital budget, whose implementation period had been extended to December 31, 2026.

Although implementation of the 2026 MDA capital budget stood at zero as of March 31, spending was recorded under other capital components. Government-Owned Enterprises accounted for N740.32bn, while the Tertiary Education Trust Fund recorded N393.56bn. Multilateral and bilateral project-tied loans contributed N287.44bn, while grants and donor-funded projects accounted for N249.50bn.

The report also showed that non-debt recurrent expenditure increased from N2.24tn in the first quarter of 2025 to N2.77tn in 2026. Personnel costs accounted for 70.73 per cent of the expenditure.

Pensions and gratuities, including service-wide pensions, rose from N161.60bn to N330.72bn, an increase of N169.12bn, or 104.65 per cent.

Combined personnel, pension and gratuity obligations reached N2.29tn in the first quarter of 2026, compared with N1.98tn in the corresponding period of the previous year. The budget implementation report, however, classifies pensions and gratuities separately from personnel costs.

The rising expenditure obligations coincided with weak revenue performance. The Federal Government generated approximately N5.08tn in the first quarter, against a target of N9.22tn, representing a shortfall of 44.93 per cent.

Personnel costs alone accounted for 38.56 per cent of actual revenue during the period, compared with approximately 36.80 per cent in the first quarter of 2025.

By Oluwafemi Shodipe.

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