The Federal Ministry of Finance has approved the settlement of outstanding payments owed to more than 1,240 contractors working across various Ministries, Departments, and Agencies (MDAs), with priority given to verified claims below ₦100 million.

According to a statement issued on Monday by Mary-Ann Duke, Senior Special Assistant on Communication and Press Secretary to the Minister of Finance, the approvals followed a detailed verification and reconciliation process aimed at confirming legitimate outstanding obligations to contractors.

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The initiative is part of ongoing efforts by the Federal Government to address accumulated liabilities, improve fiscal accountability, and strengthen trust in public financial management systems.

The ministry explained that the exercise specifically prioritises verified contractor claims under the ₦100 million threshold, ensuring that smaller businesses and service providers are among the first beneficiaries of the settlement process.

Officials noted that the verification exercise was designed to eliminate discrepancies, prevent duplicate claims, and ensure that only validated debts are paid. This, they said, is critical to maintaining transparency and safeguarding public funds.

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The payment approval is expected to provide relief to contractors who have faced prolonged delays in receiving payment for completed government projects. Many of these businesses rely heavily on government contracts for cash flow and operational stability, and outstanding debts have often placed strain on their operations.

By prioritising smaller verified claims, the government aims to ease liquidity challenges for small and medium-sized contractors, many of whom have been disproportionately affected by delayed payments in the public procurement system.

The Ministry of Finance also emphasised that the exercise aligns with broader fiscal reform efforts aimed at improving efficiency in government spending and restoring confidence in public sector contract execution.

Economic analysts often argue that clearing verified arrears can help stimulate economic activity, particularly in the construction, supply, and service sectors, where contractors play a key role in job creation and infrastructure delivery.

While the current phase focuses on claims below ₦100 million, further reviews are expected to continue for larger outstanding obligations, subject to verification and available budgetary provisions.

The Federal Government has repeatedly stated its commitment to clearing legitimate debts while ensuring that all payments undergo strict audit and compliance checks to prevent financial irregularities.