FG Finally Okays Payments to 1,240 Local Contractors

Ndubuisi Francis in Abuja

After a protracted impasse with local contractors over unpaid contractual fees reported to be in excess of N4.7 trillion, the federal government has finally announced the approval of payments to over 1,240 of them across the country.

The Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, gave the approval after a diligent verification and reconciliation undertaken by the ministry to ensure that only duly validated obligations qualify for payment, a statement issued by the ministry’s spokesperson, Efe Ovuakporie disclosed.

The contractors under the aegis of All Indigenous Contractors Association of Nigeria (AICAN), had repeatedly staged protests at the Federal Ministry of Finance headquarters and the FCT Secretariat to demand the payment of outstanding debts for executed and commissioned projects.

The most daring took place last December when they barricaded the main gate of the ministry for days with a mock coffin of the former Minister, Mr. Wale Edun, preventing any form of entry or exit.

The protesting contractors claimed that the government had been issuing payment warrants without cash backing, comparing them to “dud checks.”

 They had also criticised the central payment system implemented by the Office of the Accountant General of the Federation (OAGF) and the Ministry of Finance, advocating for a return to older payment methods.

The back and forth between the federal government and the contractors continued until Edun was recently removed in a minor cabinet exercise, which brought in Oyedele as his replacement.

However, the statement by the ministry added: “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 approval, granted by the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, follows a diligent verification and reconciliation undertaken by the Ministry to ensure that only duly validated obligations qualify for payment.

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

 The statement further stated that 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 was 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.

“This development reflects the Ministry’s commitment to translating policy objectives into tangible outcomes by resolving inherited obligations in a transparent and fiscally responsible manner.

“Over the past few months, the federal government has 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,” it further explained.

By prioritising a large number of smaller contractors rather than concentrating payments among a few large beneficiaries, the government said it was broadening the economic impact of these disbursements, supporting businesses across different sectors and regions of the country.

It noted that the latest payments were expected to strengthen confidence among contractors, suppliers, and service providers doing business with the government by demonstrating the government’s commitment to honouring duly verified obligations.

“For many beneficiaries, the release of funds represents more than a financial transaction. It provides the certainty needed to sustain operations, preserve jobs, complete ongoing projects, and contribute to economic recovery and growth.

“The Ministry remains committed to maintaining fiscal discipline while ensuring that legitimate obligations are settled in a timely manner going forward to substantially reduce outstanding liabilities over time, strengthen confidence in public financial management, and support the effective delivery of public services and infrastructure,” the statement concluded.