The Federal Government’s planned six-month transport allowance for public servants could cost an estimated ₦465.7 billion if all 1.1 million employee records on its payroll system qualify for the payment, raising questions about the programme’s funding and long-term sustainability.

The intervention, approved following a meeting with the Nigeria Labour Congress (NLC) in Abuja on October 27, will provide eligible public service workers with ₦70,000 monthly for six months, beginning in November 2026.

However, the government has not publicly specified the final number of beneficiaries or the total budget allocated to the programme. Economists have therefore urged officials to clarify how the allowance will be funded while considering longer-term measures to reduce transport expenses and ease pressure on household budgets.

An analysis based on 1,108,800 employee records on the Integrated Personnel and Payroll Information System (IPPIS) as of July 2026 puts the potential monthly cost at approximately ₦77.6 billion, rising to ₦465.7 billion over six months.

The calculation assumes that every employee record represents an eligible beneficiary. The actual expenditure could be lower if the number of verified beneficiaries is smaller or if the government adopts different payment arrangements.

The allowance comes amid elevated living costs and rising transport expenses, with petrol prices at Nigerian National Petroleum Company Limited retail outlets reportedly reaching ₦1,369 per litre.

Although inflation has moderated, many households continue to face pressure from food, transportation, healthcare and other essential expenses. Data from the National Bureau of Statistics put headline inflation at 14.63 per cent in September 2026, down from 15.39 per cent in August, while annual food inflation stood at 19.59 per cent.

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, welcomed the planned support, saying any relief for households facing economic pressure should be considered valuable.

“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,” Yusuf said.

He described the six-month duration as manageable and expressed hope that energy and transportation costs would ease during the period.

However, the outlook for energy prices remains uncertain. The World Bank’s Commodity Markets Outlook projected a significant increase in global energy prices in 2026, partly reflecting supply risks and geopolitical tensions.

Yusuf urged the government to complement the temporary allowance with measures that would make commuting more affordable.

He recommended expanding subsidised mass transit, including buses powered by compressed natural gas or diesel, and encouraging government ministries and agencies to provide free transport for their employees.

He also called on large private-sector employers to consider similar arrangements and suggested that workers whose duties can be performed remotely should be allowed to spend fewer days commuting to their offices.

“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 technology could help reduce commuting costs, particularly in major cities.

Chief Executive Officer and Partner at MDU Capital Limited, Ayodeji Ebo, also welcomed the allowance, noting that transport is one of the major expenses facing households alongside food.

He said the payment could provide temporary financial relief, but stressed that the government needed to disclose how it planned to finance the intervention.

“For illustration, covering one million workers would cost N70bn monthly, or N420bn over six months. The actual bill depends on the verified number covered,” Ebo said.

He urged the government to prioritise sustainable revenue and spending savings rather than relying on additional borrowing to finance the programme.

Ebo also called for investment in reliable and affordable mass transit, including buses and urban rail systems, arguing that such infrastructure would provide longer-lasting benefits beyond the public servants covered by the allowance.

Economist Illias Ali, however, questioned whether the intervention would adequately address the pressures facing Nigerian households.

“It’s better we solve the rudiments rather than actually doing this,” Ali said, pointing to energy security and food security as areas requiring more lasting solutions.

He also questioned the programme’s reach, noting that a transport allowance targeted at public servants would not directly assist many state and local government employees, private-sector workers or people in the informal economy unless they were separately covered.

The debate over the allowance has intensified following opposition from the Trade Union Congress of Nigeria (TUC), which rejected the government’s proposed transport support and called instead for an immediate salary increase.

In a statement issued on Wednesday by its president, Festus Osifo, and Secretary-General, N.A. Toro, the TUC said workers needed a more permanent improvement in earnings rather than another temporary intervention.

The congress argued that the government did not need to wait for negotiations over a new national minimum wage before increasing workers’ salaries, noting that there was no legal ceiling on how much employers could pay.

It proposed raising the salary of the lowest-paid worker to ₦300,000 monthly, from the current ₦70,000 minimum wage, with appropriate adjustments to other salary levels.

The TUC also criticised the government’s record on previous wage awards, alleging that the 2023 agreement had not been implemented fully or consistently across the country.

“The wage award agreed between FGN and organised labour on the 2nd of October 2023 was to be implemented until a minimum wage was agreed in 2024 but was never implemented holistically,” the statement said.

According to the congress, some workers were still owed one or two months of payments, while others had received nothing. It also alleged that payments were irregular for some beneficiaries and that more than 80 per cent of states and informal-sector workers had not benefited from a wage award.

The TUC questioned why workers should trust another temporary arrangement when previous commitments remained outstanding.

“Negotiations of a new national minimum wage must not become an excuse for postponing urgent pay increment,” the congress said.

Beyond salary adjustments, it called on federal, state and local governments to introduce measurable measures to reduce the cost of essential goods and services.

The congress also raised concerns about the implementation of outstanding agreements affecting health workers under the Joint Health Sector Unions (JOHESU).

It accused the Federal Government of failing to honour an agreement reached after months of industrial action concerning adjustments to the Consolidated Health Salary Structure (CONHESS).

The TUC said organised labour had participated in negotiations at the Federal Ministry of Labour and Employment that resulted in a communiqué, but alleged that the government had yet to fulfil its commitments.

“While the workers have kept their side of the bargain, the government hasn’t kept its side of the agreement,” the statement said.

The congress demanded immediate implementation of the CONHESS adjustment, a clear timetable, the necessary budgetary allocations and further consultations to resolve outstanding issues.

The dispute comes as the Federal Government and organised labour continue discussions over workers’ welfare and the implementation of wage-related agreements.

Under the October 27 agreement with the NLC, the government also approved the payment of outstanding peculiar allowance arrears, effective from May 1, 2026, in three equal monthly instalments beginning in November.

The parties further agreed to establish a committee to negotiate an effective date for implementing a new national minimum wage arrangement. The government also agreed to clear 19 months of outstanding allowances for health workers within three months from December, while the cost implications of the proposed CONHESS adjustment are to be assessed by the National Salaries, Incomes and Wages Commission.

Whether the transport allowance will provide meaningful relief will depend on the number of workers covered, the timely release of funds and the government’s ability to implement the payment without undermining other spending priorities. For economists and labour unions, the broader challenge remains how to improve workers’ purchasing power and reduce the cost of living beyond a temporary six-month intervention.