FG Clears N700bn Contractor Debts to Boost Economy

The Federal Government of Nigeria has announced the clearance of contractor debts totaling over N700 billion, with N436.6 billion disbursed in May 2023 alone. This initiative is part of efforts to address long-standing debts owed to local contractors, which significantly affect indigenous businesses, particularly small and medium-sized enterprises.

The Minister of Finance, Taiwo Oyedele, confirmed that payments were approved for 1,240 contractors across various ministries and departments. The latest disbursement represents a major step towards fulfilling the government's financial obligations and is expected to provide immediate liquidity support to businesses, enabling them to return to project sites, pay workers, and settle suppliers.

The government aims to broaden the economic impact of these payments by prioritizing smaller contractors rather than concentrating funds among a few major beneficiaries. This move is part of a broader commitment to resolve inherited liabilities and ensure fiscal responsibility, with the 2026 budget set to address outstanding debts owed to contractors for capital projects executed in 2024.