FG Clears Over ₦700bn Contractors’ Debt, Approves Payments to 1,240 Firms

By Margaret Abah

The Federal Government has processed payments exceeding ₦700 billion in verified obligations owed to local contractors, including ₦436.6 billion disbursed in May alone, as part of efforts to clear outstanding debts and stimulate economic activity.

The Federal Ministry of Finance disclosed this in a statement issued on Monday by its Director of Information and Public Relations, Efe Ovuakporie.

According to the ministry, payments have been approved for more than 1,240 contractors across various Ministries, Departments and Agencies (MDAs) following a comprehensive verification and reconciliation exercise.

The ministry stated that the approvals were granted by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, to ensure that only validated claims qualified for payment.

It described the disbursements as a significant step toward settling inherited financial obligations, particularly those affecting indigenous businesses and small and medium-sized enterprises (SMEs).

“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 said.

The ministry noted that contractors with verified claims of ₦100 million or less were prioritised in the latest round of payments to ensure wider distribution of funds and broader economic impact.

According to the statement, the release of the funds is expected to provide immediate relief to hundreds of businesses, enabling them to return to project sites, pay workers, settle suppliers and meet other financial commitments.

“Contractors prioritised for payment in the most recent batch are those with verified claims in the region of ₦100 million 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 ministry added.

The ministry said the initiative aligns with the Federal Government’s commitment to resolving inherited liabilities in a transparent and fiscally responsible manner while ensuring that economic policies translate into tangible benefits for businesses and citizens.

It further revealed that payment activities had accelerated significantly in recent months, with approximately ₦436.6 billion in transactions processed in May alone.

“Over the past few months, the Federal Government has processed payments exceeding ₦700 billion across various categories of verified obligations owed to local contractors. Within the month of May alone, approximately ₦436.6 billion in transactions were processed, demonstrating a significant acceleration in payment activity aimed at unlocking liquidity and supporting economic growth,” the ministry stated.

The ministry added that by prioritising a large number of smaller contractors instead of concentrating payments among a few major beneficiaries, the government was expanding the economic benefits of the intervention across sectors and regions.

It noted that the latest disbursements would strengthen confidence among contractors, suppliers and service providers working with the government, while helping beneficiaries sustain operations, preserve jobs and complete ongoing projects.

The ministry reaffirmed its commitment to fiscal discipline and the timely settlement of legitimate obligations, stressing that the approach would reduce outstanding liabilities, strengthen confidence in public financial management and enhance the delivery of public services and infrastructure.

The development comes months after the Federal Government earmarked ₦1.7 trillion in the 2026 Appropriation Bill for the settlement of outstanding debts owed to contractors for capital projects executed in 2024.