FG PAYS ₦700BN TO 1,240 CONTRACTORS — ₦436.6BN DISBURSED IN MAY ALONE

Finance Ministry targets SMEs and indigenous firms; ₦1.7trn budgeted in 2026 for full clearance

The Federal Government has paid more than ₦700 billion in verified obligations to indigenous contractors since the beginning of the year, including ₦436.6 billion processed in May alone, the Federal Ministry of Finance announced Monday.

The ministry disclosed that payment approvals covered more than 1,240 contractors across Ministries, Departments and Agencies, following a verification and reconciliation exercise to ensure only validated claims were settled. The approvals were authorised by Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele.

The ministry stated the payments were deliberately structured to prioritise a large number of smaller contractors rather than concentrating disbursements among a few major beneficiaries, broadening the economic impact across sectors and regions. "The latest disbursements represent a major step towards addressing inherited payment obligations, particularly those affecting indigenous businesses and small and medium-sized enterprises," the ministry said.

The settlement of outstanding contractor debts comes amid longstanding concerns over delayed government payments and their impact on business operations, particularly for indigenous firms and SMEs that depend heavily on public sector contracts. Delayed payments have often strained contractors' cash flows, leading to project delays, layoffs, and increased borrowing costs.

The Federal Government has budgeted ₦1.7 trillion in the 2026 Appropriation Act to settle outstanding debts owed to contractors for capital projects executed in 2024. Contractor groups have welcomed the inclusion but argue that ₦1.7 trillion remains insufficient compared to claims running into trillions of naira.