The Federal Government has budgeted the sum of N1.7 trillion in the 2026 budget to settle debts owed contractors for capital projects executed in 2024.
The amount is captured under the line item titled “Provision for 2024 Outstanding Contractor’s Liabilities.”
In 2025, contractors under the All Indigenous Contractors Association of Nigeria carried out several protests over delayed settlements to the tune of over N2 trillion.
The contractors decried the severe impact of delayed payments on their operations, with many allegedly unable to service bank loans taken to execute government projects.
Following the protests, 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 N1.7 trillion line item in the 2026 budget as a catch-up mechanism.
In addition to the N1.7 trillion for the 2024 liabilities, the government has also budgeted N100 billion for a separate line item labelled “Payment of Local Contractors’ Debts/Other Liabilities”, which may cover legacy debts from previous years, smaller contract claims, or unsettled financial commitments that were not fully verified in the current audit cycle.
The total N1.8 trillion allocation is part of the broader N23.2 trillion capital expenditure in the 2026 fiscal plan, which seeks to ramp up infrastructure delivery while cleaning up past obligations.
