Oyedele: Federal Govt Has Paid Over N700bn Verified Contractor Debts

The federal government said it had approved the processing of about N700 billion in verified obligations owed to local contractors.

The minister of finance and coordinating minister of the economy, Taiwo Oyedele, who made this known on Monday via a statement issued by the Ministry of Finance, said the approvals followed a diligent verification and reconciliation exercise.

This came as contractors under the umbrella of the All Indigenous Contractors Association of Nigeria on Monday staged a protest at the Federal Ministry of Finance in Abuja, demanding payment of outstanding project funds and rejecting claims that the federal government had disbursed N700 billion to local contractors.

According to a statement issued by the ministry on Monday, the payments were approved after a “diligent verification and reconciliation undertaken by the Ministry to ensure that only duly validated obligations qualify for payment”.

The statement, issued by the ministry’s spokeswoman, Efe Ovuakporie, noted that the government had processed payments exceeding N700 billion across various categories of verified obligations owed to local contractors.

“Within the month of May alone, approximately N436.6 billion in transactions were processed, demonstrating a significant acceleration in payment activity aimed at unlocking liquidity and supporting economic growth,” she said.

The payments cover contractors across various Ministries, Departments and Agencies (MDAs) and represent a step towards addressing long-standing payment obligations, particularly those affecting indigenous businesses and small and medium-sized enterprises (SMEs).

According to her, the contractors prioritised for payment in the most recent batch were those with verified claims in the region of N100 million 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 finance ministry said.

The government said the development reflects its commitment to translating policy objectives into tangible outcomes by resolving inherited obligations in a transparent and fiscally responsible manner.

Ovuakporie said the latest payments are expected to strengthen confidence among contractors, suppliers and service providers doing business with the government by demonstrating its commitment to honouring duly verified obligations.

The ministry said it remains committed to maintaining fiscal discipline while ensuring that legitimate obligations are settled in a timely manner and substantially reducing outstanding liabilities over time.

Meanwhile, the protesting contractors, who gathered at the ministry’s headquarters, said many members were yet to receive payments despite earlier assurances from government officials.

Speaking during the protest, the national president of the association, Jackson Nwosu, said contractors had previously met with officials of the ministry, where they were promised the release of about N40 billion to beneficiaries.

According to him, members had submitted verified payment lists across different categories of claims, with expectations that funds would begin reflecting in beneficiaries’ accounts last Friday.

“We were expecting all the payments to drop into beneficiaries’ accounts by Friday, but that did not happen. Only a few persons, from what we have seen, have received payments,” he said.

Nwosu accused the government of failing to honour agreements reached with contractors, warning against attempts to shift the burden of delayed payments onto them.

“We borrowed money from banks, financial institutions and private lenders to execute projects. The government is taking the glory while contractors are suffering,” he said.

The association’s national general secretary, Babatunde Seun, also questioned reports that N700 billion had been paid to contractors, insisting that members had not seen evidence of such payments.

“We came out this morning because of the news that N700 billion had been approved. We have submitted claims running into billions and many contractors have still not been paid. That is why we are here,” he said.

The contractors rejected proposals for partial payments, insisting that those who completed projects under previous budget cycles should be paid in full.

They further alleged that delays in the issuance of warrants to some ministries, departments and agencies were slowing down the payment process.

Another member of the association, Ndubueze Kingsley, described the situation as unprecedented, saying contractors who had completed jobs should not be subjected to prolonged payment delays.

“I have been a contractor for almost 25 years and this is the first time contractors have been negotiating endlessly after completing jobs,” he said.

He added that the delay in payments had pushed some contractors into financial distress, with reports of business and asset losses.

The protesters vowed to remain at the ministry until their demands were addressed and all agreements with government officials implemented.

Responding to the protesters, the Permanent Secretary, Special Duties, Federal Ministry of Finance, Mohammed Sanusi, clarified that the funds in question were not immediately available for disbursement, stressing the difference between approval and actual payment.

“It is not that the monies are on the ground to pay the protesting contractors immediately. Some of these monies have been approved. Please get it clear, approval is different from payment,” he said.

Sanusi added that the government was working to settle outstanding liabilities following engagements with relevant financial authorities.

“N700 billion has been approved by the federal government for payment to contractors. An additional N70 billion has been assigned for payment to this association,” he said.

He assured that payment processes were ongoing and would soon begin to reflect in beneficiaries’ accounts.

“Payment will start dropping any moment from now,” he said.

The contractors, however, insisted that they would continue their protest until concrete payments were confirmed and all agreed obligations fulfilled.

Efforts to restore calm continued as both parties maintained their positions on the status of the payments.