The Federal Government has disbursed more than N700 billion to settle verified debts owed to local contractors in recent months, with N436.6 billion paid out in May alone as part of efforts to stimulate economic activity and clear outstanding obligations.
The Federal Ministry of Finance disclosed the development 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 over 1,240 contractors across various Ministries, Departments and Agencies (MDAs) following a comprehensive verification and reconciliation exercise.
The statement said the approvals were granted by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, to ensure that only duly authenticated claims were processed for payment.
The ministry noted that the exercise was aimed at resolving long-standing liabilities inherited by the government, particularly those affecting indigenous firms and small and medium-sized enterprises (SMEs).
It explained that contractors with verified claims of N100 million and below were given priority in the latest round of disbursements in order to broaden the impact of the intervention and provide relief to smaller businesses.
“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 added that the payments would enable affected contractors to resume work on project sites, settle outstanding obligations to suppliers, pay workers and support business operations.
It further revealed that payment activities had increased significantly in recent months, with 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.
The ministry said the government’s decision to prioritise numerous smaller contractors rather than concentrate payments among a handful of large firms would ensure wider economic benefits across different sectors and regions of the country.
It expressed confidence that the disbursements would strengthen trust among contractors, suppliers and service providers engaged by the government while helping businesses sustain operations, retain jobs and complete ongoing projects.
Reaffirming its commitment to prudent financial management, the ministry said the government would continue to settle legitimate obligations in a transparent and fiscally responsible manner to reduce outstanding liabilities and improve confidence in public financial administration.
The latest development comes as the Federal Government earmarked N1.7 trillion in the 2026 Appropriation Act for the settlement of outstanding debts owed to contractors for capital projects executed in 2024.