…But contractors say they haven’t received any payments
By Yinka Giwa
The Federal Government has approved more than N700 billion for the settlement of verified debts owed to over 1,240 local contractors, in a move aimed at easing liquidity constraints in the economy and stimulating business activity across the country.
The Federal Ministry of Finance disclosed the development on Monday, stating that the payments form part of ongoing efforts to clear inherited obligations and support indigenous businesses, particularly small and medium-scale enterprises affected by delayed government payments.
In a statement issued by the ministry’s Director of Information and Public Relations, Efe Ovuakporie, the government said the approvals followed a verification and reconciliation exercise conducted to ensure that only legitimate claims qualified for payment.
According to the ministry, contractors with verified claims of N100 million or less were prioritised in the latest phase of disbursements to ensure that a larger number of businesses benefit from the intervention.
The ministry said the release of funds would enable contractors to return to project sites, pay workers, settle suppliers, meet financial commitments and contribute to economic growth.
It disclosed that payment activities had accelerated significantly in recent months, with approximately N436.6 billion processed in May alone.
“Over the past few months, the Federal Government has processed payments exceeding N700 billion across various categories of verified obligations owed to local contractors,” the statement said.
The ministry added that spreading payments across a broad range of smaller contractors, rather than concentrating them among a few major beneficiaries, would deepen the impact of the intervention across sectors and regions.
It said the initiative was designed to strengthen confidence in government contracting, preserve jobs, sustain business operations, and facilitate the completion of ongoing projects.
The government also reaffirmed its commitment to fiscal discipline and timely settlement of legitimate obligations, noting that the approach would reduce outstanding liabilities, improve public financial management, and enhance service delivery.
As part of the effort to address the backlog of contractor debts, the Federal Government has earmarked N1.7 trillion in the 2026 Appropriation Bill for the settlement of outstanding obligations arising from capital projects executed in 2024.
Meanwhile, members of the All Indigenous Contractors Association of Nigeria (AICAN) on Monday stormed the Federal Ministry of Finance in Abuja seeking clarification over reports that N700 billion had already been released to contractors, including members of the association.
The contractors said the amount formed part of an estimated N1 trillion owed for projects executed in 2024, but complained that many of their members had yet to receive any payment despite previous assurances from government officials.
AICAN President, Jackson Nwosu, said about 85 per cent of contractors were still awaiting payment, despite earlier engagements with the Ministry of Finance and the Office of the Accountant-General of the Federation.
According to him, contractors had expected funds to begin reflecting in their accounts after discussions with government officials, but only a small number had reportedly received payments.
“We were expecting payments to begin reflecting, but that has not happened for most members,” Nwosu said.
The association’s National Secretary, Babatunde Seun, also questioned reports of the N700 billion disbursement, insisting that many contractors had seen no evidence of the payments.
He maintained that contractors who had duly executed projects should be paid in full rather than receiving partial settlements.
Responding to the concerns, the Permanent Secretary for Special Duties at the Ministry of Finance, Mohammed Sanusi, clarified that while the funds had been approved, they were yet to be fully disbursed.
He explained that approval did not automatically translate to immediate payment, adding that government was still addressing other financial obligations while working to settle verified contractor debts.
Sanusi disclosed that N700 billion had been approved by the Federal Government for contractor payments, while an additional N70 billion had been allocated to members of the association.
“Some of these monies have been approved. Approval is different from payment. We met with the Accountant-General and we are working on contractors’ payments. Payment will start dropping any moment from now,” he said.