The Federal Government has disbursed over ₦700 billion in verified obligations owed to local contractors in recent months, with a significant portion, approximately ₦436.6 billion, processed in May alone. This initiative aims to clear long-standing debts and inject much-needed liquidity into the economy.
Payments have been approved for more than 1,240 contractors across various government bodies. The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, granted these approvals following a thorough verification and reconciliation process to ensure the validity of claims.
This move is a significant step towards addressing inherited payment obligations, particularly benefiting indigenous businesses and small and medium-sized enterprises (SMEs). The Federal Ministry of Finance stated that these disbursements provide immediate liquidity support and reinforce the government's commitment to meeting its financial obligations.
Contractors with verified claims of ₦100 million or less were prioritized in this latest batch of payments. The release of these funds is expected to offer immediate relief, enabling businesses to resume projects, pay workers and suppliers, and meet other financial commitments, thereby supporting economic activity nationwide.
The ministry described the development as part of the government’s commitment to resolving inherited liabilities transparently and fiscally responsibly. Payment activities have notably accelerated in recent months, with the May disbursements demonstrating a significant increase aimed at unlocking liquidity and fostering economic growth.
By prioritizing a larger number of smaller contractors, the government aims to broaden the economic impact of these disbursements across various sectors and regions. This approach is expected to strengthen confidence among contractors, suppliers, and service providers doing business with the government, helping them sustain operations, preserve jobs, and complete ongoing projects.
The Federal Government had previously budgeted ₦1.7 trillion in the 2026 Appropriation Bill to settle outstanding debts owed to contractors for capital projects executed in 2024. The ministry reaffirmed its commitment to fiscal discipline and the timely settlement of legitimate obligations to reduce outstanding liabilities and bolster confidence in public financial management.
