The Federal Government has disbursed more than N700bn to settle verified debts owed to local contractors in recent months, with N436.6bn paid out in May alone as part of efforts to clear outstanding obligations and stimulate economic activities.
The Punch reported that this was disclosed in a statement released on Monday by the Director of Information and Public Relations at the Federal Ministry of Finance, Efe Ovuakporie.
According to the ministry, over 1,240 contractors across different Ministries, Departments and Agencies had also received approval for payment after a verification and reconciliation process conducted to validate genuine claims.
The approvals were reportedly granted by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
The ministry explained that the payments formed part of the Federal Government’s drive to address inherited liabilities, especially those affecting indigenous firms and small and medium-scale enterprises.
It stated, “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 noted that contractors with verified claims of N100m and below were given priority in the latest phase of payments.
The ministry added that the release of funds would enable affected businesses to resume work on project sites, offset salary obligations, settle suppliers and fulfil other financial responsibilities.
“Contractors prioritised for payment in the most recent batch are those with verified claims in the region of N100m or less.
“The release of funds is expected to provide immediate relief to hundreds of businesses, enabling them to return to project sites, pay workers, settle suppliers, meet financial commitments, and support economic activity across the country,” the statement added.
The ministry described the payments as part of ongoing efforts by the government to clear inherited obligations in a transparent and fiscally responsible manner while ensuring that policy objectives deliver practical economic benefits.
It further revealed that payment activities witnessed a sharp increase in recent months, with May accounting for transactions worth about N436.6bn.
“Over the past few months, the Federal Government has processed payments exceeding N700bn across various categories of verified obligations owed to local contractors. Within the month of May alone, approximately N436.6bn in transactions were processed, demonstrating a significant acceleration in payment activity aimed at unlocking liquidity and supporting economic growth,” the ministry stated.
According to the ministry, spreading payments across numerous smaller contractors instead of concentrating them among a few major beneficiaries would widen the economic impact across different sectors and regions of the country.
It also said the development would improve confidence among contractors, suppliers and service providers engaged by the government while helping beneficiaries sustain operations, retain jobs and complete ongoing projects.
The ministry reaffirmed the government’s commitment to fiscal discipline and prompt settlement of legitimate obligations, noting that the strategy would help reduce outstanding liabilities, strengthen confidence in public financial management and improve the delivery of infrastructure and public services.
Meanwhile, the Federal Government proposed N1.7tn in the 2026 Appropriation Bill for the settlement of outstanding debts owed to contractors for capital projects executed in 2024.
