The recently negotiated wage agreement between the Federal Government and the Labour Congress, along with salaries for federal workers and other non-debt recurrent costs, is anticipated to consume N7.76tn in 2023.

This insight is based on data extracted from the initial 2023 budget and the recently ratified 2023 supplementary budget.

The supplementary budget, amounting to N2.18tn, was sanctioned by the central government to accommodate new expenses, including the approved wage increase for workers following the removal of the fuel subsidy.

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According to the budget details, the Minister of Budget and Economic Planning, Abubakar Bagudu, highlighted key allocations, such as N605bn for national defense and security to sustain and accelerate progress in the sector.

N300bn has been earmarked for the repair of bridges, including the Eko and Third Mainland bridges, as well as the construction, rehabilitation, and maintenance of roads nationwide.

Another N210bn is designated for the payment of wage awards, covering September to December 2023, with a commitment to pay N35,000 each to approximately 1.5 million federal employees.

The total budget breakdown reveals that N1.01tn is allocated for recurrent expenditure, while N1.17tn is earmarked for capital expenditure.

The supplementary budget is set to elevate the total non-debt recurrent expenditure to N7.76tn and capital expenditure to N4.53tn.

This increase will bring the overall budget for 2023 to N19.81tn. Excluding debt servicing, the budget totals N13.26tn.

Of the N7.76tn allocated for recurrent expenditure, a significant portion, approximately N4.31tn (55.54%), will be allocated to salaries.

In the first quarter of 2023, the government has already spent N978.10bn on salaries. The total borrowing to finance the budget stands at N2.30tn, with a projected fiscal deficit of N9.01tn.

The Federal Government has expressed concern over rising expenditure costs amid declining revenues.

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The Accountant General of the Federation, Mrs Oluwatoyin Madein, emphasized the need to enhance revenue generation strategies to align with the growing economic challenges.

Nigeria continues to grapple with a revenue crisis, attributed to declining oil production and challenges in diversifying the economy.

The former Minister of Finance, Budget, and National Planning, Zainab Ahmed, acknowledged that revenue generation remains a significant fiscal constraint for the federation.