The Federal Government has announced plans to settle all verified outstanding payments owed to contractors across various Ministries, Departments, and Agencies (MDAs), even as criticism mounts over stalled project implementation and budget underperformance.
This was disclosed in a statement by Mr Bawa Mokwa, Director of Press and Public Relations in the Office of the Accountant-General of the Federation. According to the statement, only contracts that were awarded through proper procedures and executed according to specification will 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. Efforts are underway to pay for contracts duly awarded and completed according to specifications,” Mokwa stated.
He added that the next tranche of the N35,000 wage award to federal workers would be disbursed in June 2025, after the June salary is paid.
The government’s clarification comes in response to growing concerns over delayed payments to contractors and the broader issue of poor fiscal implementation. A recent Guardian report, titled ‘2024-2025 fiscal policy crisis: Project funding, execution stall over poor budget implementation’, highlighted widespread stagnation in public projects amid overlapping budget cycles and non-release of capital funds, which stakeholders say are crippling infrastructure delivery.
Three months after the 2025 budget was passed, The Guardian found that several MDAs are yet to receive adequate funding for critical projects. Contractors, including those with verified certificates of project completion, have reportedly gone unpaid for over a year. Many are struggling to service bank loans taken to finance government projects, with some facing asset seizures due to defaults.
The situation has raised red flags within financial institutions, as the rising volume of non-performing loans linked to public sector projects threatens their stability. Sources told The Guardian that some contractors have had to restructure short-term loans multiple times due to non-payment.
Amid these developments, lawmakers are pressing for an extension of the capital component of the 2024 budget, which has already been carried over once. On Tuesday, Senate Committee on Appropriations Chair, Olamilekan Adeola, presented the 2024 Appropriation Act (Amendment) Bill 2025, seeking a second extension until December 31. He said the extension is needed to enable MDAs to utilise already released funds and avoid abandoning critical projects.
However, the push for extension was accompanied by calls from some lawmakers to investigate the Federal Government’s failure to implement the capital component of the budget. Senate Minority Leader Abba Moro criticised the government’s approach, warning of growing distrust among private sector players. “Unless we take it very seriously with the Ministry of Finance, this parliament will become an embarrassment itself,” he said.
Critics argue that fiscal mismanagement, politicisation of spending, and a lack of transparency are undermining the government’s credibility. Economists like Prof. Godwin Owoh and Dr. Chiwuike Uba have warned that the execution of overlapping budgets and the selective payment of contractors could have far-reaching economic and political consequences.
“The non-payment of contractors could be part of a scheme to bend the majority of the elite ahead of 2027,” Owoh said.
Uba also noted that the current fiscal disarray may be connected to multiple budget cycles running concurrently, creating administrative confusion and funding gaps.
