The Association of Small Business Owners of Nigeria has warned that the Federal Government’s N70,000 monthly transport allowance for public servants could push private-sector workers to demand similar support from small employers that are already stretched. ASBON President Dr Femi Egbesola raised the concern while reacting to the intervention, which the government approved earlier this week after a conciliation meeting with organised labour.
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What the government agreed
Following meetings on 22 and 27 October at the Federal Ministry of Labour and Employment, the government agreed to pay a N70,000 transport intervention to workers at all levels for six months, starting in November 2026. The national minimum wage is also N70,000, set in 2024 when it rose from N30,000. The ministry’s statement did not explain how payments would be made or which categories of workers would benefit. The government also agreed to begin minimum wage negotiations immediately.
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Where the pressure lands on SMEs
Egbesola described the allowance as a welcome relief for eligible workers that could lift morale, purchasing power and productivity. His concern was the knock-on effect. “For SMEs, the challenge is that employees may increasingly demand similar support, while employers are already contending with high operating costs and limited capacity to increase wages,” he said.
A transport allowance for public servants is not a private-sector obligation. In practice, though, it shifts what employees in small firms see as reasonable, and many small employers have no room in their budgets to match it.
Labour is split, which keeps the issue open
The agreement has not settled the labour question. The Nigeria Labour Congress welcomed the allowance. The Trade Union Congress rejected it as inadequate and proposed that the lowest-paid federal worker earn N300,000. Gbenga Olowoyo, National Secretary of the Joint National Public Service Negotiating Council, said labour still wants a N500,000 minimum wage while remaining open to reasonable negotiation.
If the minimum wage talks produce a higher figure, small businesses will feel the effect more sharply than most, because they have thinner margins and weaker access to credit than large employers.
What Egbesola wants next
Egbesola urged the government to back the temporary relief with long-term measures to bring down transport costs and ease the burden on businesses. He said the wider economic impact of the allowance would depend on sustainable funding and on whether the resulting rise in demand translates into real business growth.
The more durable fix for workers and employers alike is cheaper transport, not larger allowances. Until that arrives, small business owners will carry wage expectations set by a budget they do not control.
