Workers’ N70,000 Transport Allowance to Cost FG ₦1.218trn in 6 Months

By Abibat Kazeem

The Federal Government’s approval of a monthly ₦70,000 transport allowance for each federal worker to cushion the effects of the rising transportation costs could cost the government approximately ₦1.218 trillion over six months if all estimated 2.9 million workers receive the payment.

The intervention, according to the government, is intended to ease the financial burden on federal workers struggling with the rising cost of commuting to and from their workplaces amid increasing living expenses.

A calculation based on a workforce of 2.9 million puts the potential monthly cost of the allowance at ₦203 billion.

InkNews understands that if sustained throughout the six-month period announced by the government, the intervention would require a total expenditure of ₦1.218 trillion.

The Director-General of the Bureau of Public Service Reforms (BPSR), Dasuki Ibrahim Arabi, had, in March this year, quoted available data which he said put the number of federal workers at between 2.7 million and 2.9 million.

Arabi had disclosed this while receiving a delegation from the Edo State Civil Service, led by the Head of Service, Anthony Okungbowa, which paid an official visit to the Bureau to understudy its reform initiatives and explore areas of collaboration.

This is even as the approval of the monthly ₦70,000 transport allowance for public servants has renewed questions about the economic consequences of President Bola Ahmed Tinubu’s removal of the petrol subsidy and the extent to which the promised benefits of the reform are reaching Nigerian workers.

When President Tinubu announced the removal of the subsidy during his inauguration on May 29, 2023, his administration argued that the policy was necessary to free up government resources for investment in infrastructure, healthcare, education and other critical sectors.

The government maintained that the subsidy was unsustainable and that the resources previously spent on it could be redirected towards national development.

However, the immediate aftermath of the policy saw petrol prices rise sharply, triggering increases in transportation fares, food prices and the cost of goods and services.

The resulting economic pressure has remained a major concern for households and workers, with organised labour repeatedly demanding measures to cushion the effects of the reforms.

₦1.218tn to cushion transport cost effects

A calculation based on an estimated 2.9 million federal workers puts the monthly cost of the newly approved allowance at ₦203 billion.

Over six months, the government would spend approximately ₦1.218 trillion if every worker in that estimated workforce qualified for the payment.

Questions Over the Cost of the Intervention

Although the allowance could provide temporary relief to workers facing high commuting expenses, the projected expenditure raises questions about the fiscal implications of the intervention.

At ₦1.218 trillion over six months, the programme would represent a substantial financial commitment, assuming all 2.9 million workers receive the payment.

However, the actual cost would depend on the number of eligible beneficiaries, the payment arrangements and the categories of employees covered by the allowance.

The government would also need to clarify whether the allowance applies exclusively to federal civil servants or extends to other categories of federal public-sector employees.