The Federal Government has earmarked N1.7 trillion in the 2026 Appropriation Bill to settle outstanding payments owed to contractors for capital projects completed in 2024. The allocation, listed under “Provision for 2024 Outstanding Contractor’s Liabilities,” highlights the government’s recognition of delayed payments, which have sparked protests and demands from local contractors and civil society groups.
The budgetary move comes after indigenous contractors raised concerns over unpaid obligations exceeding N2 trillion, with many unable to service bank loans taken for government projects. In 2025, the All Indigenous Contractors Association of Nigeria staged demonstrations in Abuja, pressing for urgent settlement of verified arrears, some of which were only partially cleared due to revenue constraints.
In addition to the N1.7tn allocation, the 2026 budget also sets aside N100 billion under “Payment of Local Contractors’ Debts/Other Liabilities”, aimed at clearing legacy obligations or smaller claims. Combined, the total N1.8tn commitment forms part of the broader N23.2tn capital expenditure plan, reflecting the government’s efforts to boost infrastructure delivery while addressing past payment backlogs.
Contractor debt in Nigeria has been a long-standing challenge, worsened by delays in capital releases and partial funding of projects. Babatunde Seun-Oyeniyi, National Secretary of the All Indigenous Contractors Association, confirmed that many contractors remain owed over N500 billion despite repeated meetings with the Ministry of Finance, prompting fears that some payments would be deferred into 2026.
The government has, however, stated its commitment to clearing verified obligations. Finance Minister Wale Edun emphasized that over N2 trillion in outstanding 2024 capital budget obligations had already been paid in 2025, and the focus now shifts to settling 2025 projects. President Bola Tinubu also directed the formation of a high-level committee to verify contractor claims, ensuring that future payments are disbursed efficiently and transparently.
source: punch