FG Pays N700bn Verified Contractor Debts, Disburses N436.6bn in May
The Federal Government has cleared over N700 billion in verified debts owed to local contractors in recent months, including N436.6 billion disbursed in May, as part of efforts to settle outstanding obligations and stimulate economic activity across the country.
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 verification and reconciliation process aimed at ensuring that only legitimate claims were honoured.
The ministry said the approvals were granted by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, describing the exercise as a key step in addressing inherited liabilities and supporting indigenous businesses, particularly small and medium-sized enterprises.
“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.
It explained that contractors with verified claims of N100 million or less were prioritised in the latest round of disbursements to ensure wider economic impact and quicker relief for smaller businesses.
The ministry noted that the release of funds would enable many contractors 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 N100 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,” it stated.
The government described the payments as part of a broader strategy to resolve inherited obligations in a transparent and fiscally responsible manner while translating economic policies into tangible benefits.
The ministry further revealed that payment activities accelerated significantly in recent months, with transactions worth about 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. 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 statement added.
According to the ministry, prioritising a large number of smaller contractors instead of concentrating payments among a few major beneficiaries will help spread the economic benefits across sectors and regions.
It added that the disbursements would boost confidence among contractors, suppliers and service providers working with the government while helping businesses sustain operations, preserve jobs and complete ongoing projects.
The ministry reaffirmed its commitment to fiscal discipline and the timely settlement of legitimate obligations, noting that the approach would strengthen confidence in public financial management and support infrastructure delivery and public service provision.
The development comes months after the Federal Government earmarked N1.7 trillion in the 2026 Appropriation Bill for the settlement of outstanding debts owed to contractors for capital projects executed in 2024.
