Nigeria’s Payroll System Saves Billions, but Experts Call for Broader Reform
The Federal Government’s ministries, departments, and agencies (MDAs) collectively remitted ₦1.96 trillion through the Integrated Personnel and Payroll Information System (IPPIS) in 2024, according to data analysed from GovSpend, a public finance tracker powered by BudgIT.
The remittances, drawn from federal universities, colleges, the military, correctional services, and police commands, highlight the growing role of the IPPIS in curbing financial inefficiencies. Monthly contributions peaked in September at ₦547.5 billion, while November saw the lowest remittance at ₦68.9 billion.
Launched to automate salary payments and enhance transparency, the IPPIS is seen as a cornerstone of fiscal accountability. Yet, experts warn of persistent flaws in its implementation, from limited coverage to ongoing payroll fraud.
Achievements Tempered by Challenges
Economists have hailed the system’s progress. Shedrach Israel, an analyst at Lotus Beta Analytics, noted its success in saving billions and reducing fraud. “IPPIS has proven its value, but its coverage is incomplete,” he said, pointing to ghost workers and outdated records as ongoing challenges.
Israel stressed the need for comprehensive integration across all public service sectors to eliminate wastage and fraud fully. “The current results are promising, but there are still loopholes,” he said, adding that expanding IPPIS is critical to achieving its full potential.
Femi Oladele, a public policy expert at Meristem Securities, offered a more skeptical view. While acknowledging the system’s achievements, he questioned its cost-effectiveness. “Reducing fraud is beneficial, but at what cost? The debate should focus on ensuring the system is both efficient and economical,” Oladele argued.
Data Problems and Broader Economic Woes
Experts also highlighted Nigeria’s long-standing data challenges as a major obstacle. “The inability to effectively process existing data is a key issue,” Oladele remarked, emphasizing that poor data management undermines the system’s efficiency.
Beyond technical hurdles, Oladele pointed to deeper structural issues, including economic disparities that incentivize payroll fraud. “As long as the economy remains in disarray, fraud will persist—often perpetuated by those in power,” he said.
The Path Forward
Both experts agree that while IPPIS represents a significant step forward in public sector accountability, its impact will remain limited without broader reforms. Expanding the system’s reach, addressing data inefficiencies, and tackling economic inequities are critical for sustained success.
For now, the Federal Government’s commitment to IPPIS signals progress, but its ultimate effectiveness will depend on decisive actions to address these systemic challenges.
