The Federal Government has processed payments exceeding N700 billion in verified obligations owed to local contractors over the past few months, as part of efforts to clear long-standing debts and stimulate economic activity across the country.
According to the Federal Ministry of Finance, N436.6 billion was disbursed in May alone, marking a significant acceleration in contractor payments under the government’s debt clearance programme.
The ministry disclosed this in a statement issued by its Director of Information and Public Relations, Efe Ovuakporie, noting that more than 1,240 contractors across various Ministries, Departments and Agencies (MDAs) have benefited from the latest approvals.
It explained that the payments were authorised following a verification and reconciliation exercise designed to ensure that only duly validated claims were settled.
The Ministry of Finance stated that the initiative is aimed at addressing inherited payment obligations, particularly those affecting indigenous businesses and small and medium-sized enterprises (SMEs).
According to the statement, contractors with verified claims of N100 million or less were prioritised in the most recent batch of payments.
“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 ministry said.
It added that the release of funds is expected to provide relief to businesses by enabling them to return to project sites, pay workers, settle suppliers and meet other financial commitments.
The ministry further noted that the strategy of prioritising smaller contractors is intended to widen the economic impact of the disbursements across sectors and regions, rather than concentrating payments among a few large beneficiaries.
It stated that over the past few months, the Federal Government has processed more than N700 billion in total payments across various verified obligations.
“Within the month of May alone, approximately N436.6 billion in transactions were processed, demonstrating a significant acceleration in payment activity aimed at unlocking liquidity and supporting economic growth,” the ministry added.
The government said the payments are also expected to strengthen confidence among contractors and service providers engaged in public projects, while helping beneficiaries sustain operations, preserve jobs and complete ongoing infrastructure works.
It reaffirmed its commitment to fiscal discipline, transparency and the timely settlement of legitimate obligations, adding that the initiative forms part of broader efforts to improve public financial management and support economic recovery.
The Federal Government has also budgeted N1.7 trillion in the 2026 Appropriation Bill to clear outstanding debts owed to contractors for capital projects executed in 2024.
