The Federal Government has approved the payment of verified outstanding debts owed to 1,240 contractors across various Ministries, Departments and Agencies (MDAs), in a move aimed at easing financial pressures on businesses and accelerating project delivery nationwide.
The approval followed an extensive verification and reconciliation exercise conducted to authenticate pending contractual obligations owed by the government.
This was disclosed in a statement issued on Monday by Mary-Ann Duke, Senior Special Assistant on Communication and Press Secretary to the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele.
According to the ministry, priority was given to contractors with verified claims of N100 million and below to ensure that the intervention reaches a broad spectrum of indigenous businesses and small and medium-sized enterprises (SMEs) operating across the country.
The government said the payments are expected to inject immediate liquidity into the economy, enabling contractors to resume work on stalled projects, settle outstanding obligations to suppliers and service providers, and retain workers whose jobs depend on ongoing government contracts.
The Ministry of Finance noted that more than N700 billion in verified obligations to local contractors has been processed in recent months as part of efforts to address longstanding debt commitments.
It added that approximately N436.6 billion worth of transactions were processed in May alone, reflecting what it described as a significant increase in the pace of government payments.
Officials said the decision to prioritise smaller contractors was designed to spread the economic benefits across sectors and regions, strengthen business sustainability, protect jobs and support the timely completion of critical public projects.
The ministry further stated that the initiative would help rebuild confidence among contractors, suppliers and service providers engaged by government institutions, while reinforcing the administration’s commitment to honouring its financial obligations.
The latest development comes amid growing calls from contractors for the settlement of long-overdue debts.
In January, aggrieved contractors staged a protest at the Federal Ministry of Finance, temporarily blocking access to the Minister of State for Finance, Dr. Doris Uzoka-Anite, over unpaid contracts.
The issue also attracted legislative attention months later when the Senate constituted a committee to engage the ministry on outstanding liabilities owed to contractors across the country.
Government officials expressed optimism that the ongoing payment programme would provide much-needed relief to businesses, stimulate economic activity and support infrastructure development nationwide.
The settlement of contractor debts has remained a major issue in Nigeria’s public finance management system, with many contractors complaining of prolonged delays in receiving payments for completed projects.
Over the years, unpaid government obligations have contributed to business closures, project abandonment, job losses and mounting debts among contractors, particularly SMEs that rely heavily on government patronage.
Since assuming office, the current administration has repeatedly pledged to improve fiscal discipline, clear verified legacy debts and restore confidence in government contracting. The latest payment approvals form part of broader efforts by the Ministry of Finance to reconcile outstanding obligations, improve cash management and stimulate economic growth through timely settlement of legitimate claims.
Industry stakeholders have argued that prompt payment of contractors is essential for sustaining infrastructure development, supporting local enterprises and enhancing the credibility of government procurement processes.
