The Federal Government has processed payments exceeding ₦700 billion in verified obligations owed to local contractors over the past few months, including ₦436.6 billion disbursed in May alone, as part of efforts to clear inherited debts and stimulate economic activity.
The Federal Ministry of Finance disclosed this in a statement issued on Monday, revealing that payments have also been approved for more than 1,240 contractors across various Ministries, Departments and Agencies (MDAs).
According to the ministry, the approvals were granted following a comprehensive verification and reconciliation exercise aimed at ensuring that only legitimate and validated claims qualified for payment.
The ministry said contractors with verified claims of ₦100 million or less were prioritised in the latest round of payments, a move designed to provide immediate liquidity support to small and medium-sized businesses across the country.
“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.
Officials noted that the release of funds would enable many contractors to return to project sites, settle outstanding obligations, pay workers, and meet commitments to suppliers and service providers.
₦436.6bn Paid in May
The ministry disclosed that payment activities accelerated significantly in recent months, with approximately ₦436.6 billion processed in May 2026 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,” the statement noted.
The government said the accelerated payment programme forms part of broader efforts to unlock liquidity within the economy, support business operations, and encourage economic growth.
According to the ministry, distributing payments across a large number of smaller contractors rather than concentrating them among a handful of major beneficiaries is expected to broaden the economic impact of the intervention.
The government believes the disbursements will strengthen confidence among contractors, suppliers, and businesses working with public institutions while helping preserve jobs and support the completion of ongoing projects nationwide.
The ministry described the initiative as part of its commitment to resolving inherited liabilities in a transparent and fiscally responsible manner.
Part of Wider Debt Settlement Plan
The latest payments come amid efforts by the Federal Government to reduce outstanding obligations and improve confidence in public financial management.
Earlier, the government earmarked ₦1.7 trillion in the 2026 Appropriation Act to settle outstanding debts owed to contractors for capital projects executed in 2024.
Officials say the ongoing settlement of verified claims will help reduce debt overhang, improve infrastructure delivery, and reinforce confidence in the government’s ability to honour contractual commitments.
