The Federal Government has budgeted the sum of N1.7tn in the 2026 Appropriation Bill to settle outstanding debts owed to contractors for capital projects executed in 2024.
A breakdown of the proposed 2026 national budget showed that the amount was captured under the line item titled “Provision for 2024 Outstanding Contractor’s Liabilities,”
This budgetary provision followed mounting pressure from indigenous contractors and civil society groups who, in 2025, raised alarm over unpaid contractual obligations allegedly exceeding N2tn.
Earlier, Minister of Works David Umahi promised to clear verified arrears owed to federal contractors before the end of 2025.
However, only partial payments were made amid revenue constraints, prompting the inclusion of the N1.7tn line item in the 2026 budget as a catch-up mechanism.
The nation’s contractor debt backlog has been a recurring fiscal issue, worsened by delayed capital releases, partial cash-backing of budgeted projects, and underperformance in revenue targets
Edited by Favour Owonibi.