The Federal Government has processed payments exceeding N700bn in verified obligations owed to local contractors over the past few months, including N436.6bn disbursed in May alone, as part of efforts to clear outstanding arrears and stimulate economic activity.
The Federal Ministry of Finance disclosed this in a statement on Monday by its Director of Information and Public Relations, Efe Ovuakporie, noting that payments had been approved for more than 1,240 contractors across various Ministries, Departments and Agencies (MDAs).
According to the ministry, the disbursements followed a verification and reconciliation exercise designed to ensure that only validated claims were eligible for payment.
The approvals were granted by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, after the completion of the review process.
The ministry said the latest tranche of payments represents a significant step toward addressing inherited liabilities, particularly those affecting indigenous businesses and small and medium-sized enterprises.
It stated: “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 explained that contractors with verified claims of N100m or less were prioritised in the latest phase of disbursements.
It added that the release of funds would provide immediate relief to businesses by enabling them to return to project sites, pay workers, settle suppliers, and meet other operational obligations.
“Contractors prioritised for payment in the most recent batch are those with verified claims in the region of N100m 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 statement added.
The ministry described the initiative as part of the government’s broader commitment to resolving inherited debts in a transparent and fiscally responsible manner while ensuring that policy translates into measurable economic impact.
It further disclosed that payment activity had accelerated in recent months, with about N436.6bn processed in May alone.
“Over the past few months, the Federal Government has processed payments exceeding N700bn across various categories of verified obligations owed to local contractors. Within the month of May alone, approximately N436.6bn 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 prioritising a large pool of smaller contractors rather than a few large beneficiaries would help spread the economic impact across sectors and regions.
It said the payments were expected to strengthen confidence among contractors, suppliers and service providers, while supporting job retention and project delivery nationwide.
The Federal Government reaffirmed its commitment to fiscal discipline and timely settlement of legitimate obligations, noting that the strategy would help reduce outstanding liabilities and improve trust in public financial management.
The Telegraph earlier reported that the Federal Government had earmarked N1.7tn in the 2026 Appropriation Bill to settle outstanding contractor debts arising from capital projects executed in 2024.
