By Prince Ojeti
The Federal Government has announced plans to clear all verified outstanding payments owed to contractors for completed projects across Ministries, Departments, and Agencies (MDAs) by June 2025.
The move aims to restore confidence in public financial management and support economic stability.
Bawa Mokwa, Director of Press and Public Relations at the Office of the Accountant-General of the Federation (AGF), disclosed in a statement that only properly awarded and duly executed contracts would be honoured.
“The Federal Government has records of contracts executed by MDAs and is meticulous in the payment for these contracts to guarantee value for money spent,” Mokwa stated.
He noted that the government remains committed to rewarding contractors who meet procedural and quality standards, reinforcing fiscal accountability.
The announcement comes amid widespread frustration among contractors who have endured prolonged delays in receiving payment, with some invoices pending since October 2024. Many in the construction and services sectors—key drivers of Nigeria’s infrastructure development have struggled with liquidity constraints as a result.
Industry analysts say the planned debt clearance could help unlock economic activity, boost contractor morale, and encourage greater participation in public-private partnerships.
In addition, Mokwa confirmed that the government’s N35,000 wage award for civil servants will continue, with the next disbursement scheduled for June 2025 following the month’s salary payments. The wage award is intended to cushion the effects of rising living costs on workers.
This policy update comes on the heels of the Senate’s decision to extend the implementation of the 2024 capital budget to December 31, 2025. Lawmakers say the extension is necessary to allow MDAs to complete stalled projects, particularly as concerns mount over the centralized payment process managed by the AGF’s office.
Several senators criticized the system, accusing it of selectively funding projects and frustrating development efforts. “You begin to hear rumors that the Minister of Finance and the Office of the Accountant General are picking and choosing projects they will finance; this is not right,” Senator Abdul Ningi said. Senate Minority Leader Abba Moro warned that delays in payments are discouraging private-sector investment in public projects “Unless we take it very seriously with the Ministry of Finance, this parliament will become an embarrassment itself. Even those who have funds to commit to projects will be very unwilling to commit their money because they fear they will not be paid.” Senator Seriake Dickson attributed the problem to political distractions, suggesting “Maybe there is too much preoccupation with politics and 2027. Maybe there is too much concentration on receiving defectors across the country.”
Senator Yahaya Abdullahi added. “Right now, what is going on is that the activities of the government are being stalled. Contractors who have even succeeded in completing their projects have not been paid.”
The payment crisis has stalled critical infrastructure works, with some contractors fearing permanent abandonment of projects. Industry stakeholders are now urging swift implementation of the payment plan to prevent job losses and restore investor confidence.
As the government moves to fulfill its pledge by June 2025, expectations remain high for transparency, equity, and timely disbursement. How it handles this process will be a key test of its commitment to economic reform and accountability.
Inside business
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