FG clears over N700 billion owed to contractors, approves payments to 1,240 firms 

The Federal Ministry of Finance disclosed that over N700 billion in verified debts owed to local contractors has been processed in recent months, with contractors holding claims of N100 million or less prioritised in the latest round of disbursements.

The move is expected to provide a cash flow boost to indigenous businesses and small and medium-sized enterprises (SMEs), enabling them to resume stalled projects, pay workers, and meet obligations to suppliers.

In a statement issued on Monday, Mary-Ann Duke, Senior Special Assistant on Communication and Press Secretary to the Minister of Finance, said the approvals followed a comprehensive verification and reconciliation exercise to authenticate outstanding contractor claims.

What the FG is saying 

According to the ministry, contractors with verified claims of N100 million or less were given priority in the latest batch of payments to ensure that smaller businesses benefit quickly from the intervention.

• “The Federal Ministry of Finance has approved payments to more than 1,240 contractors, providing immediate liquidity support to businesses across the country and reinforcing the Federal Government’s commitment to meeting its financial obligations,” the statement said.

The ministry disclosed that approximately N436.6 billion in verified transactions were processed in May alone, reflecting a significant acceleration in efforts to settle outstanding obligations.

It added that the payment programme is designed to support businesses across sectors and regions, helping contractors sustain operations, preserve jobs, and complete ongoing government projects.

The ministry further noted that the initiative would strengthen confidence among contractors, suppliers, and service providers engaged in government business.

Get up to speed

The settlement of outstanding contractor debts comes amid longstanding concerns over delayed government payments and their impact on business operations, particularly for indigenous firms and SMEs that depend heavily on public sector contracts.

Delayed payments have often strained contractors’ cash flows, leading to project delays, layoffs, and increased borrowing costs.

The issue gained national attention in January when local contractors blocked the entrance to the Federal Ministry of Finance, preventing the then Minister of State for Finance, Doris Uzoka-Anite, from accessing the premises over unpaid debts.

Six months later, the Senate intervened by setting up a committee to engage the ministry and seek a resolution to the mounting obligations owed to contractors.

The current payment exercise follows the government’s broader efforts to clear verified liabilities while improving fiscal management and restoring confidence in public procurement processes.

What you should know  

The Federal Government has made fresh budgetary provisions to address contractor debt as part of efforts to calm tensions and resolve lingering disputes.

In the 2026 Appropriation Bill, N100 billion was earmarked under a specific budget line for the payment of local contractors’ debts.

• The allocation is intended to support the settlement of verified and outstanding obligations owed to indigenous contractors.
• Contractor groups have welcomed the inclusion but argue that N100 billion is insufficient compared to claims of liabilities running into trillions of naira.

The Federal Ministry of Finance disclosed that over N700 billion in verified debts owed to local contractors has been processed in recent months, with contractors holding claims of N100 million or less prioritised in the latest round of disbursements.

The move is expected to provide a cash flow boost to indigenous businesses and small and medium-sized enterprises (SMEs), enabling them to resume stalled projects, pay workers, and meet obligations to suppliers.

In a statement issued on Monday, Mary-Ann Duke, Senior Special Assistant on Communication and Press Secretary to the Minister of Finance, said the approvals followed a comprehensive verification and reconciliation exercise to authenticate outstanding contractor claims.

What the FG is saying 

According to the ministry, contractors with verified claims of N100 million or less were given priority in the latest batch of payments to ensure that smaller businesses benefit quickly from the intervention.

• “The Federal Ministry of Finance has approved payments to more than 1,240 contractors, providing immediate liquidity support to businesses across the country and reinforcing the Federal Government’s commitment to meeting its financial obligations,” the statement said.

The ministry disclosed that approximately N436.6 billion in verified transactions were processed in May alone, reflecting a significant acceleration in efforts to settle outstanding obligations.

It added that the payment programme is designed to support businesses across sectors and regions, helping contractors sustain operations, preserve jobs, and complete ongoing government projects.

The ministry further noted that the initiative would strengthen confidence among contractors, suppliers, and service providers engaged in government business.

Get up to speed

The settlement of outstanding contractor debts comes amid longstanding concerns over delayed government payments and their impact on business operations, particularly for indigenous firms and SMEs that depend heavily on public sector contracts.

Delayed payments have often strained contractors’ cash flows, leading to project delays, layoffs, and increased borrowing costs.

The issue gained national attention in January when local contractors blocked the entrance to the Federal Ministry of Finance, preventing the then Minister of State for Finance, Doris Uzoka-Anite, from accessing the premises over unpaid debts.

Six months later, the Senate intervened by setting up a committee to engage the ministry and seek a resolution to the mounting obligations owed to contractors.

The current payment exercise follows the government’s broader efforts to clear verified liabilities while improving fiscal management and restoring confidence in public procurement processes.

What you should know  

The Federal Government has made fresh budgetary provisions to address contractor debt as part of efforts to calm tensions and resolve lingering disputes.

In the 2026 Appropriation Bill, N100 billion was earmarked under a specific budget line for the payment of local contractors’ debts.

• The allocation is intended to support the settlement of verified and outstanding obligations owed to indigenous contractors.
• Contractor groups have welcomed the inclusion but argue that N100 billion is insufficient compared to claims of liabilities running into trillions of naira.