Finance minister moves to resolve over N4trn debt to contractors

Taiwo Oyedele, finance minister and coordinating minister of the economy, has sought to draw a line under a long-running dispute with local contractors, pledging a more transparent and fiscally grounded process to settle over N4 trillion outstanding government obligations while preserving the momentum of economic reforms.

Speaking after a meeting in Abuja, Oyedele said the government would pursue a “fair, transparent, and structured” approach to addressing verified claims tied to capital projects, an assurance which signals a shift towards tighter coordination between fiscal policy and contractor payments.

The talks, which brought together senior finance officials and representatives of the All-Indigenous Contractors Association of Nigeria, are the clearest indication yet that the administration is attempting to resolve arrears without derailing broader efforts to stabilise public finances in Nigeria. The dispute has lingered for years, with contractors citing delayed payments, cost variations and uncertainty tied to policy changes as key constraints on project delivery.

“Resolving these obligations is important not just for contractors, but for confidence in government, job creation, business continuity, and overall economic stability,” Oyedele said during the meeting, stressing the wider economic implications of the standoff.

Read also: Tinubu courts global investors as Nigeria deepens reforms

Africa’s most populous economy has been navigating a complex reform cycle marked by efforts to boost revenue, rationalise spending and restore investor confidence.

While those measures have won cautious backing from international observers, they have also strained liquidity across sectors dependent on government contracts, particularly construction and infrastructure.

Officials familiar with the discussions said the government is working to reconcile claims through existing institutions, including the finance ministry and the accountant-general’s office, with an emphasis on verifying liabilities before payments are scheduled. The approach reflects a balancing act between honoring commitments and managing fiscal constraints in a high-debt, low-revenue environment.

Oyedele acknowledged the contractors’ concerns, including the impact of delayed payments on cash flow and project timelines, and said the administration intends to establish a clearer framework for settling obligations going forward.

Read also: Nigeria’s capital market surges past N125tn due to fiscal reset – Oyedele 

That framework is expected to prioritise verified claims and align disbursements with available resources, reducing the risk of future arrears.
“The government recognises the critical role local contractors play in infrastructure development and economic growth. We are determined to resolve all outstanding issues through structured engagement within the framework of fiscal responsibility,” he said.

Some contractors present at the renewed dialogue welcomed the engagement, describing it as a step towards restoring trust and ensuring continuity in project execution. Many firms have faced mounting financial pressure as unpaid invoices accumulated, forcing some to scale back operations or delay new investments.

The finance ministry has not provided a timeline for clearing the backlog, but officials indicated that ongoing consultations would shape the final structure.