Local contractors have been vocal about payment delays, claiming in 2025 that unpaid federal obligations surpassed ₦2 trillion. Groups like the All Indigenous Contractors Association of Nigeria demonstrated in Abuja, stating that the delays were harming their businesses and making it difficult to repay loans used for government projects.
Earlier, the Minister of Works, David Umahi, promised that verified debts would be settled by the end of 2025, but revenue shortages allowed only partial payments. The ₦1.7 trillion in the 2026 budget is meant to cover the remaining unpaid balances.
Additionally, the government allocated ₦100 billion under a separate category called “Payment of Local Contractors’ Debts/Other Liabilities” to address older debts and smaller verified claims not fully included in recent audits. Combined, the ₦1.8 trillion for contractor payments is part of the ₦23.2 trillion proposed for capital spending in 2026, as the government aims to boost infrastructure while resolving past payment issues.
Nigeria’s contractor debt problem has been ongoing for years due to late budget releases, incomplete project funding, and repeated revenue shortfalls. In December 2025, the National Secretary of the All Indigenous Contractors Association, Babatunde Seun-Oyeniyi, told reporters that despite talks with the Finance Minister, Wale Edun, and legislative intervention, no payments had been made. He accused the government of delaying obligations into the next fiscal year, leaving contractors with over ₦500 billion in unpaid completed projects.
However, government officials disputed this claim. In August 2025, they announced settling over ₦2 trillion in unpaid 2024 project debts and promised better funding for 2025 projects. Finance Minister Wale Edun stated that most inherited debts had been cleared, and efforts were now focused on current funding.
By December 2025, President Bola Tinubu took notice of the issue, expressing frustration over unpaid contractors and ordering a committee to verify claims and organize payments. The President’s Special Adviser on Information, Bayo Onanuga, said Tinubu was unhappy to learn that nearly 2,000 contractors were still owed and demanded a structured resolution.
The 2026 budget’s contractor payment provisions will depend on the ongoing verification process, with funds likely released in stages based on confirmed claims. The total proposed 2026 budget is ₦58.47 trillion, including ₦23.2 trillion for capital projects, ₦15.9 trillion for debt repayment, ₦15.25 trillion for recurrent expenses, and ₦4.09 trillion for statutory transfers.
