Why FG Just Released ₦700 Billion To Contractors Across Nigeria

The Federal Government has processed payments exceeding ₦700 billion in verified debts owed to local contractors as part of efforts to clear longstanding obligations and improve liquidity within the economy.....KINDLY READ THE FULL STORY HERE▶

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 approvals were also granted for payments to more than 1,240 contractors across various Ministries, Departments, and Agencies.

It stated that the payments were approved by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, following a verification and reconciliation exercise designed to ensure that only legitimate and validated claims were settled.

The ministry explained that the disbursements form part of government efforts to address inherited liabilities, particularly debts owed to indigenous contractors, small businesses, and medium-scale enterprises.

1,240 Contractors Benefit

The ministry noted that the latest approvals are expected to provide immediate relief to businesses nationwide and reinforce confidence in the government’s commitment to meeting its financial obligations.

It said contractors with verified claims of ₦100 million and below were prioritised in this payment cycle.

According to the statement, this approach was adopted to ensure that smaller contractors—many of whom had been affected by delayed payments—receive timely support to resume operations, meet financial obligations, and sustain business activities.

It added that the released funds would enable beneficiaries to return to project sites, pay workers, settle suppliers, and support broader economic activity across the country.

The ministry further revealed that payment processing had increased significantly in recent months, with ₦436.6 billion handled in May alone.

It said this reflects the government’s renewed drive to clear verified debts and stimulate economic activity by improving cash flow to contractors and service providers.

Over the past months, the Federal Government has now processed over ₦700 billion in verified obligations owed to local contractors, covering multiple categories of outstanding payments.

The ministry also emphasized that prioritising smaller contractors was a deliberate strategy aimed at ensuring wider distribution of economic benefits rather than concentrating payments among a few large firms.

It said this would help expand the impact of the disbursement and strengthen business activity across different sectors and regions.

According to the statement, the latest payments are expected to boost confidence among contractors and service providers engaged in federal projects.

The ministry reaffirmed the government’s commitment to settling legitimate obligations in a transparent and fiscally responsible manner, adding that verification and reconciliation processes would continue to guide future payments.

It further noted that the approach is intended to reduce outstanding liabilities, improve public financial management, and enhance service delivery and infrastructure development.

The development comes amid reports that the Federal Government has earmarked ₦1.7 trillion in the 2026 Appropriation Bill to clear outstanding contractor debts for capital projects executed in 2024.