The Federal Government could spend about ₦465.7bn on its newly approved six-month transport allowance for public servants if all 1.1 million employee records on its payroll system are eligible for the benefit, an analysis by The PUNCH has indicated.

The proposed expenditure has renewed debate over how best to cushion workers against rising living costs, with economists welcoming the planned assistance but urging the government to introduce lasting solutions to Nigeria’s transportation and household expenses.

Under an agreement reached with the Nigeria Labour Congress (NLC) in Abuja on October 27, the Federal Government approved a monthly payment of ₦70,000 for public servants for six months, beginning in November. However, the agreement did not establish the final number of beneficiaries or the total funds earmarked for the programme.

Figures from the Integrated Personnel and Payroll Information System showed that 1,108,800 employee records were held on the platform as of July 2026. Using that figure, The PUNCH estimated that the allowance could cost approximately ₦77.6bn monthly, bringing the potential six-month bill to ₦465.7bn if every record qualified.

The estimate is conditional, as the final cost will depend on the number of workers verified as eligible and the government’s payment arrangements.

The intervention comes as Nigerians continue to contend with expensive transportation, food and other essential needs. Petrol prices at Nigerian National Petroleum Company Limited retail outlets have reportedly climbed to ₦1,369 per litre, adding to the cost of daily commuting and the movement of goods.

Although the National Bureau of Statistics reported that headline inflation declined from 15.39 per cent in August to 14.63 per cent in September, food inflation remained high at 19.59 per cent year-on-year.

Economists who spoke on the intervention said the allowance could offer immediate relief, particularly to lower-income earners, but stressed that temporary payments would not resolve the underlying economic pressures.

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 any assistance that helps Nigerians cope with the current economic situation should be welcomed.

He noted that the payment could be particularly beneficial to workers on lower incomes, while expressing hope that transportation and energy costs would ease before the six-month arrangement expires.

However, projections in the World Bank’s latest Commodity Markets Outlook point to possible further pressure on energy prices. The lender forecast a 32 per cent increase in global energy prices in 2026, reversing three consecutive years of decline, before a potential moderation in 2027. It also warned that supply disruptions could worsen the outlook.

Yusuf therefore called for additional measures to make commuting more affordable, including greater investment in subsidised public transportation using compressed natural gas (CNG) or diesel-powered buses.

He also urged government ministries and agencies to provide transportation for their employees, while encouraging large private companies to explore similar arrangements.

For employees whose responsibilities can be performed remotely, he recommended reducing the number of days they must travel to their workplaces, particularly in major cities where commuting expenses are substantial.

Yusuf said wider use of technology could help employers limit unnecessary journeys and reduce the financial burden on workers.

Similarly, Ayodeji Ebo, Chief Executive Officer and Partner at MDU Capital Limited, described the proposed allowance as a welcome development, noting that transportation, alongside food, accounts for a significant share of household expenditure.

He said the payment would provide temporary financial relief to eligible public servants but warned that the government’s ability to sustain the programme would depend on the number of beneficiaries and the availability of funds.

Ebo illustrated the potential cost by estimating that one million beneficiaries would require ₦70bn every month, or ₦420bn over the six-month period.

He urged the government to explain how the programme would be financed, stressing that approval of the allowance did not automatically establish that adequate funding had been secured.

He further advised the government to consider savings and sustainable revenue sources before resorting to additional borrowing to fund the intervention.

Beyond the allowance, Ebo advocated investment in dependable and affordable public transport, including buses and urban rail systems, arguing that such infrastructure would provide longer-term benefits to public servants, private-sector employees and self-employed Nigerians.

Economist Illias Ali, however, questioned whether the measure would adequately address the broader economic difficulties facing households.

Ali argued that government policy should focus more on the causes of rising living costs, particularly energy and food insecurity, rather than relying heavily on temporary financial assistance.

He also raised concerns about the programme’s limited reach, noting that state and local government employees, private-sector workers and people in the informal economy face similar transportation pressures.

According to him, the government must establish what will happen after the six-month payment period, as workers could return to the same financial difficulties if the underlying problems remain unresolved.

TUC REJECTS ALLOWANCE, DEMANDS ₦300,000 MINIMUM SALARY

While the NLC reached an agreement with the government on the transport allowance, the Trade Union Congress of Nigeria (TUC) rejected the proposal, insisting that workers require a permanent salary increase rather than another temporary payment.

The congress called for the immediate review of workers’ salaries, arguing that government employees should not have to wait for negotiations on a new national minimum wage before receiving improved pay.

In a statement issued on Wednesday by its President, Festus Osifo, and Secretary-General, N.A. Toro, the TUC said it had formally approached the Federal Government through the Office of the Secretary to the Government of the Federation to demand an urgent salary adjustment in response to rising living costs.

The statement followed a National Administrative Council meeting held in Abuja on October 8, 2026.

The labour body argued that there was no legal maximum on the amount an employer could pay, adding that negotiations over the national minimum wage should not prevent the government from increasing salaries when economic conditions demand it.

It proposed raising the salary of the lowest-paid federal worker from the current ₦70,000 to ₦300,000, with corresponding adjustments for other salary levels.

The TUC maintained that a permanent pay increase would offer more dependable support to workers struggling to afford food, transportation, healthcare and other necessities.

The congress also expressed reservations about the government’s record on previous wage agreements, particularly the wage award negotiated with organised labour in October 2023.

According to the TUC, the arrangement was intended to remain in place until a new minimum wage was agreed in 2024, but its implementation was incomplete.

The congress alleged that some workers were still owed one or two months of payments, while others had never received the allowance. It further claimed that payments were irregular for some beneficiaries, forcing them to repeatedly demand their entitlements.

The TUC also argued that more than 80 per cent of states and workers in the informal sector had not benefited from any form of wage award, questioning why the government was introducing another temporary arrangement without resolving previous outstanding obligations.

It warned that the failure to fulfil earlier commitments could weaken workers’ confidence in fresh agreements.

Beyond salary adjustments, the congress urged federal, state and local governments to introduce measurable policies to reduce the prices of essential goods and services.

FG, LABOUR AGREE ON ARREARS AND HEALTH WORKERS’ PAY

The dispute over the transport allowance comes amid wider negotiations between the Federal Government and organised labour on workers’ welfare.

The October 27 conciliation agreement also provided for the settlement of outstanding peculiar allowance arrears dating from May 1, 2026. The arrears are to be paid in three equal monthly instalments beginning in November.

However, the government and labour representatives did not agree on the effective date for implementing the national minimum wage arrangements under discussion. They instead agreed to establish a minimum wage negotiation committee and commence meetings immediately.

The government also committed to clearing 19 months of outstanding allowances owed to health workers within three months from December.

Meanwhile, the financial implications of a proposed adjustment to the Consolidated Health Salary Structure (CONHESS) are to be assessed by the National Salaries, Incomes and Wages Commission.

The TUC, however, accused the Federal Government of failing to honour a seven-month-old agreement on the CONHESS adjustment for health workers under the Joint Health Sector Unions (JOHESU).

According to the congress, Osifo led a delegation of organised labour representatives, including JOHESU leaders and a representative of another labour congress, in negotiations intended to resolve the dispute.

The discussions culminated in a conciliation meeting at the Federal Ministry of Labour and Employment, where both sides agreed to a communiqué.

The TUC alleged that while the unions had fulfilled their own obligations, the government had failed to implement its commitments, describing the delay as inconsistent with the principle of good-faith negotiations.

It demanded the immediate implementation of the CONHESS adjustment, a clear timetable for execution, the provision of the required budgetary allocations and the resolution of outstanding issues in consultation with the unions.

The congress warned that health workers should not be expected to continue delivering essential services while agreements affecting their welfare remained unfulfilled.

It maintained that resolving the outstanding salary and allowance issues was necessary to rebuild confidence between the government and organised labour.

Source: The PUNCH