Nigeria Releases Payments to 1,240 Contractors as Government Moves to Unlock Business Liquidity
The Federal Government has approved payments to more than 1,240 local contractors as part of efforts to clear verified outstanding obligations and inject fresh liquidity into businesses operating across Nigeria.
The approval, authorised by the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, followed a verification and reconciliation exercise conducted by the Federal Ministry of Finance to ensure that only legitimate and validated claims were processed.
The latest payment tranche covers contractors working with various Ministries, Departments and Agencies (MDAs), with a focus on businesses owed government funds, particularly indigenous contractors and small and medium-sized enterprises (SMEs).
Contractors with verified claims of up to ₦100 million were prioritised in the current phase. The release of funds is expected to help businesses resume stalled projects, pay employees, settle suppliers, meet financial obligations, and improve cash flow.
The move comes as part of the Federal Government’s broader strategy to resolve inherited liabilities while strengthening confidence in public financial management and government procurement processes.
According to the Ministry, more than ₦700 billion has been processed in payments for verified obligations owed to local contractors in recent months. In May alone, transactions worth about ₦436.6 billion were processed, signalling an acceleration in efforts to reduce outstanding debts and support economic activity.
The government said prioritising a larger number of smaller contractors instead of focusing only on major beneficiaries would spread the economic impact of the payments across different sectors and regions.
The development is expected to boost confidence among contractors, suppliers, and service providers that engage with government, while supporting job retention and the completion of critical projects.
For many businesses, the payments provide much-needed working capital at a time when rising operating costs and economic pressures have affected cash flow.
The Ministry of Finance reiterated its commitment to balancing fiscal responsibility with the timely settlement of verified obligations, noting that the approach would help reduce accumulated liabilities, improve service delivery, and support sustainable economic growth.