FG Disburses ₦700 Billion To Contractors To Clear Old Debts

The Federal Government has processed payments exceeding ₦700 billion in verified obligations owed to local contractors, as part of efforts to clear long-standing debts and inject liquidity into the economy.

Naija News reports that the Federal Ministry of Finance disclosed this on Monday, June 8, 2026, in a statement issued by its Director of Information and Public Relations, Efe Ovuakporie.

According to the ministry, about ₦436.6 billion was processed in May alone, while payments had also been approved for more than 1,240 contractors across Ministries, Departments and Agencies.

The ministry said the payments were approved by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, after a verification and reconciliation exercise to ensure that only duly validated claims were paid.

It said the latest disbursements were part of the government’s efforts to address inherited payment obligations, especially debts affecting indigenous contractors, small businesses and medium-sized enterprises.

1,240 Contractors Benefit

The ministry said the payment approvals would provide immediate support to businesses across the country and strengthen confidence in the government’s commitment to honouring its obligations.

“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 read.

It explained that contractors with verified claims of ₦100m or less were prioritised in the latest batch of payments.

According to the ministry, the decision was taken to ensure that smaller contractors, many of whom had struggled with delayed payments, received relief that could help them resume operations and meet urgent financial obligations.

“Contractors prioritised for payment in the most recent batch are those with verified claims in the region of ₦100m 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 ministry added.

The ministry further disclosed that payment activities had increased significantly in recent months, with ₦436.6bn processed in May alone.

It said the development showed the government’s renewed push to clear verified debts and support economic growth by improving cash flow to contractors and service providers.

“Over the past few months, the Federal Government has processed payments exceeding ₦700bn across various categories of verified obligations owed to local contractors. Within the month of May alone, approximately ₦436.6bn in transactions were processed, demonstrating a significant acceleration in payment activity aimed at unlocking liquidity and supporting economic growth,” the statement stated.

The ministry noted that the payments would allow beneficiaries to return to abandoned or delayed project sites, pay workers, settle suppliers and complete ongoing projects.

It added that the approach would also help preserve jobs and support economic activities across different sectors and regions.

The ministry said the government deliberately prioritised a large number of smaller contractors instead of concentrating the payments among a few major beneficiaries.

It explained that this would help broaden the economic impact of the disbursements and ensure that more businesses across the country benefit from the payment exercise.

According to the statement, the latest payments are expected to strengthen confidence among contractors, suppliers and service providers doing business with the government.

The ministry also said the disbursements were in line with the administration’s commitment to resolving inherited liabilities in a transparent and fiscally responsible manner.

The Federal Ministry of Finance reaffirmed its commitment to the timely settlement of legitimate obligations, saying the government would continue to apply verification and reconciliation processes before payments are made.

It said the approach would help reduce outstanding liabilities, improve public financial management and support the delivery of public services and infrastructure.

The development comes after reports that the Federal Government budgeted ₦1.7 trillion in the 2026 Appropriation Bill to settle outstanding debts owed to contractors for capital projects executed in 2024.