FG’s ₦465.7bn Transport Allowance Plan Faces TUC Rejection

The Federal Government’s proposed six-month transport allowance for public servants could cost an estimated ₦465.7 billion if all 1,108,800 employee records on its payroll system qualify for the payment, amid opposition from the Trade Union Congress of Nigeria (TUC).

The government approved a monthly allowance of ₦70,000 for public servants beginning in November following a conciliation meeting with the Nigeria Labour Congress (NLC) in Abuja on Tuesday.

The agreement provides for payments across all levels of the public service for six months, although it does not specify the final number of eligible beneficiaries or the total amount budgeted for the intervention. Punch Newspapers

An analysis based on records from the Integrated Personnel and Payroll Information System as of July 2026 estimated the monthly cost at ₦77.6 billion and the six-month expenditure at ₦465.7 billion.

The estimate assumes that every employee record represents an eligible beneficiary. The actual cost will depend on the verified number of workers covered and the government's final payment arrangements.

The intervention comes amid persistent pressure on household budgets, with rising fuel prices increasing the cost of commuting and transporting goods.

Petrol prices at Nigerian National Petroleum Company Limited retail stations had risen to ₦1,369 per litre, while headline inflation declined to 14.63 per cent in September from 15.39 per cent in August. Food inflation stood at 19.59 per cent year-on-year. Punch Newspapers

The TUC, however, rejected the allowance, insisting that the government should increase workers' salaries rather than introduce another temporary relief measure.

In a statement issued by its President, Festus Osifo, and Secretary-General, Nuhu Toro, the congress said it had written to the Federal Government on October 8 to demand an immediate salary review in response to rising living costs.

The union argued that the government did not need to wait for negotiations on the national minimum wage before increasing workers' pay, noting that no law imposed a maximum salary.

It proposed that the lowest-paid federal worker's salary could be raised to ₦300,000 from the current ₦70,000, with corresponding adjustments to other salary levels.

The congress maintained that a permanent increase would provide more dependable relief than temporary payments, which it said might not reach all workers.

The TUC also expressed concern over the implementation of previous wage agreements, alleging that the 2023 wage award had not been fully paid to all eligible workers.

According to the congress, some workers remained owed one or two months' payments, while others had received none. It also alleged that payments were irregular for some beneficiaries, requiring repeated demands before arrears were settled.

The union questioned the government's decision to propose another temporary allowance when outstanding obligations from earlier agreements remained unresolved.

It further called on federal, state and local governments to adopt measures to reduce the cost of essential goods and services, including food, transport and healthcare.

The congress also demanded the implementation of outstanding agreements with health workers under the Joint Health Sector Unions (JOHESU), particularly adjustments to the Consolidated Health Salary Structure.

It said an agreement reached after negotiations and industrial action had yet to be fully implemented, despite commitments made by the government.

The TUC called for the immediate implementation of the salary structure adjustment, publication of a clear timetable, provision of the necessary budgetary allocations and continued engagement with the relevant unions. Punch Newspapers

Meanwhile, economists acknowledged that the proposed allowance could provide short-term relief but urged the government to address the underlying causes of rising transport costs.

Muda Yusuf, former Director-General of the Lagos Chamber of Commerce and Industry and Chief Executive Officer of the Centre for the Promotion of Private Enterprise, said the intervention could benefit low-income workers.

However, he recommended investment in affordable mass transit, including buses powered by compressed natural gas or diesel, as well as free staff buses provided by government agencies and larger private employers.

He also suggested that organisations consider remote work arrangements where possible to reduce commuting expenses, particularly in major cities.

Ayodeji Ebo, Chief Executive Officer and Partner at MDU Capital Limited, similarly described the allowance as a positive development but urged the government to disclose its funding arrangements and prioritise sustainable revenue sources over additional borrowing.

Another economist, Illias Ali, questioned whether a temporary payment to public servants would adequately address the broader cost-of-living crisis, arguing that energy security, food security and support for other categories of workers also required attention. Punch Newspapers

The October 27 agreement also provides for outstanding peculiar allowance arrears, effective from May 1, 2026, to be paid in three equal monthly instalments beginning in November.

The government further agreed to clear 19 months of outstanding allowances for health workers within three months from December, while the cost implications of proposed adjustments to the Consolidated Health Salary Structure would be assessed by the National Salaries, Incomes and Wages Commission.

Negotiations on the national minimum wage are expected to continue through a committee established by the parties.

The disagreement highlights continuing tensions between the government and organised labour over how best to cushion workers against rising living costs, with the TUC insisting that lasting salary improvements and fulfilment of existing agreements should take precedence over temporary allowances.