ABUJA — The Federal Government of Nigeria has approved payments for over 1,240 contractors across various Ministries, Departments, and Agencies (MDAs), marking a significant move to clear verified outstanding debts and inject much-needed liquidity into the economy.

The approval, granted by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, follows a rigorous verification and reconciliation exercise conducted by the Ministry. This process was designed to ensure that only duly validated contractual obligations were approved for settlement.

Focus on Indigenous SMEs

A key feature of this latest disbursement round is the prioritization of smaller firms. According to a statement issued by the Ministry of Finance, contractors with verified claims of ₦100 million or less were given priority.

This strategic decision aims to maximize the economic impact of the funds by supporting a large number of indigenous businesses and Small and Medium-sized Enterprises (SMEs) across various sectors and regions, rather than concentrating payments among a few large beneficiaries.

Clearing the Backlog

The move comes as the government accelerates its efforts to resolve a massive backlog of inherited debt, which has been a point of significant friction between contractors and the state.

  • Recent Progress: Over the past few months, the Federal Government has processed payments exceeding ₦700 billion in verified obligations.

  • May Disbursements: In May 2026 alone, approximately ₦436.6 billion in transactions were processed, signaling a major acceleration in payment activity.

Expected Economic Impact

The government expects these disbursements to have an immediate, positive effect on the business environment. By receiving these payments, contractors are expected to:

  • Return to stalled project sites to resume work.

  • Settle outstanding obligations to workers and suppliers.

  • Restore confidence among service providers doing business with public institutions.

The Ministry emphasized that this initiative reflects a broader commitment to fiscal discipline and transparency, aiming to resolve long-standing liabilities while ensuring that legitimate government obligations are settled in a timely manner going forward.