By Paul Dada
The Federal Government has confirmed that it has paid more than N700 billion in verified obligations owed to local contractors in recent months. It says N436.6 billion of the total amount was processed in May alone.
This was disclosed by the Federal Ministry of Finance in a statement issued on Monday by its Director of Information and Public Relations, Efe Ovuakporie.
The ministry said payments had been approved for more than 1,240 contractors working with various Ministries, Departments and Agencies, following a detailed verification and reconciliation process designed to ensure that only legitimate claims were settled.
The approvals were granted by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
According to the ministry, the exercise formed part of efforts to resolve inherited liabilities and ease the financial pressure facing indigenous businesses, particularly 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.”
It said that priority was given to contractors with validated claims of N100 million or less in the latest round of payments.
The statement added: “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 ministry noted that the release of funds would allow many contractors to resume stalled projects, settle outstanding obligations to suppliers and employees, and improve business operations.
It described the initiative as part of a broader effort by the government to address outstanding debts transparently while maintaining fiscal responsibility.
Providing further details, the ministry revealed that payment processing had gathered pace significantly in recent months, particularly in May.
“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 statement said.
The ministry also stressed that spreading payments across a large number of smaller contractors, rather than concentrating them among a handful of major beneficiaries, would deliver wider economic benefits across different sectors and regions.
It expressed confidence that the disbursements would improve trust among contractors, suppliers and service providers engaged by government institutions, while helping businesses sustain operations, protect jobs and complete ongoing projects.
Reaffirming its commitment to prudent financial management, the ministry said the timely settlement of genuine obligations would reduce outstanding liabilities, strengthen confidence in public finance administration and support the delivery of infrastructure and public services.
