The Federal Government has set aside N100 billion in the proposed 2026 Appropriation Bill to pay off outstanding debts owed to indigenous (local) contractors nationwide, as part of measures to address persistent payment delays in the public sector.
The allocation, listed under “Payment of Local Contractors’ Debts/Other Liabilities” in the service-wide vote, is aimed at providing much-needed relief to Nigerian-owned companies for work already executed on government projects.
Contractors have repeatedly highlighted how delayed payments have affected their cash flow, led to loan defaults, and jeopardised business continuity.
This provision is included in the N58.47 trillion national budget presented by President Bola Tinubu in December 2025, which allocates N23.2 trillion for capital expenditure while prioritising the settlement of legacy obligations.
The decision follows recent public demonstrations by contractors seeking payment of arrears. On December 2, 2025, indigenous contractors held a protest at the Ministry of Finance in Abuja over unpaid federal government debts.
Here are scenes from the December 2025 protest by contractors at the Ministry of Finance demanding settlement of long-overdue payments:
One week later, the Coalition of Indigenous FCT Contractors staged another demonstration over an alleged N5.2 billion still unpaid by the Federal Capital Territory Administration (FCTA).
The Federal Ministry of Finance headquarters in Abuja, venue of the recent contractor protests:Separately, under the service-wide vote, the government has also proposed N10 billion as payment to Galaxy Backbone Limited for ICT and related services provided to various ministries, departments, and agencies (MDAs).
While the N100 billion provision signals government commitment to restoring trust in the contracting process, effective implementation, particularly timely release of funds will be key, given past experiences of delayed or partial disbursements.
The budget proposals are currently undergoing scrutiny and debate at the National Assembly.
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