FG’s Workers Transport Allowance May Gulp N465bn
The Federal Government’s six-month transport allowance for its workers could cost an estimated N465.7bn if all 1.1 million employee records on its payroll system qualify for the payment.
The government approved a monthly allowance of N70,000 ($50) for public servants beginning in November, following a conciliation meeting with the Nigeria Labour Congress, the country’s biggest workers association, in Abuja on Tuesday. The agreement provides for the payment across all levels for six months, although it did not specify the number of beneficiaries or the total amount budgeted for the intervention.
An analysis based on 1,108,800 employee records held on the Integrated Personnel and Payroll Information System as of July 2026, puts the potential monthly cost at N77.6bn and the six-month expenditure at N465.7bn.
The calculation assumes that every employee record represents an eligible beneficiary. The actual cost will depend on the verified number of workers covered by the agreement and the government’s final payment arrangements.
The proposed intervention comes amid elevated living costs, with fuel prices adding to the cost of commuting and the distribution of goods.
Petrol prices at Nigerian National Petroleum Company Limited retail stations across the country have risen to N1,369 per litre.
Although inflation has moderated, household expenses remain under pressure. Nigeria’s headline inflation rate fell to 14.63 per cent in September from 15.39 per cent in August, according to the National Bureau of Statistics, while food inflation stood at 19.59 per cent year on year.
Economists who spoke with our correspondent on Wednesday welcomed the prospect of immediate relief for workers but said the government needed to complement the payments with measures to address transport costs, improve household purchasing power and tackle the underlying drivers of economic hardship.
Former Director-General of the Lagos Chamber of Commerce and Industry and Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the allowance would have an impact, particularly on low-income earners.
“Every relief that we get for the people, the citizens need a lot of support at this time. So whatever support we get, I think we must welcome it,” he said.
Yusuf described the six-month duration as manageable, expressing hope that energy prices and transportation costs would ease during the period.
That expectation contrasts with the World Bank’s latest Commodity Markets Outlook, which projects global energy prices to increase by 32 per cent in 2026, reversing three consecutive years of declines, before moderating in 2027.
The lender warned that the outlook remained vulnerable to further supply disruptions, particularly if the conflict in the Middle East escalated or damage to Russia’s oil infrastructure continued.
Against this backdrop, Yusuf urged the government to pursue measures that would reduce commuting expenses beyond the temporary payments.
He called for greater investment in subsidised mass transit, including buses powered by Compressed Natural Gas or diesel, to make public transportation more affordable.
He also urged ministries and government agencies to provide free buses for their employees and encouraged larger private-sector employers to consider similar arrangements.
For workers whose duties can be performed remotely, Yusuf said employers should consider reducing the number of days they are required to report physically to the office, particularly in major cities where commuting has become expensive.
“If there are things you can do from home, you can reduce the number of days that people come to work,” he said, adding that greater use of technology could reduce commuting pressures on workers.
Chief Executive Officer and Partner at MDU Capital Limited, Ayodeji Ebo, also welcomed the allowance, describing it as a positive development because transportation is a major household expense alongside food.
He said the intervention would ease commuting costs and effectively provide eligible recipients with a temporary increase in income. However, he said the government’s ability to finance the programme would depend on the number of beneficiaries and the source of funding.
“For illustration, covering one million workers would cost N70bn monthly, or N420bn over six months. The actual bill depends on the verified number covered,” he said.
Ebo urged the government to disclose the funding provision for the programme, warning that approval alone did not establish that sufficient funds were available.
He also said spending savings and sustainable revenues should take priority over additional borrowing to finance the payments.
Beyond the immediate intervention, he called for reliable and affordable mass transit, including buses and urban rail, arguing that such investments would provide more lasting relief and benefit private-sector workers and self-employed Nigerians.
Economist Illias Ali, however, questioned whether the allowance would adequately address the pressures facing households, arguing that the government should tackle the underlying causes of rising living costs rather than rely on temporary assistance.
“It’s better we solve the rudiments rather than actually doing this,” Ali said, pointing to energy security and food security as areas requiring greater attention.
He also questioned the reach of a programme focused on public servants when state and local government employees, private-sector workers and other Nigerians faced similar pressures.
Ali said the government needed to consider what would happen when the six-month payment period ended, arguing that temporary assistance would not be sufficient without measures to improve broader economic conditions.
The debate comes as the government and organised labour continue negotiations over workers’ welfare.
The October 27 agreement also approved the payment of outstanding peculiar allowance arrears, effective from May 1, 2026, in three equal monthly instalments beginning in November.
However, the parties did not agree on the effective date for implementing the national minimum wage arrangements under discussion.
They agreed to constitute a minimum wage negotiation committee and begin meetings immediately.
The government also agreed to clear 19 months of outstanding allowances for health workers within three months from December, while the cost implications of a proposed adjustment to the Consolidated Health Salary Structure are to be assessed by the National Salaries, Incomes and Wages Commission.
