The Federal Government has approved payments to more than 1,240 local contractors as part of efforts to clear verified debts exceeding ₦700 billion and inject liquidity into businesses across Nigeria.

According to Channels Television, the approval followed a verification and reconciliation exercise carried out by the Federal Ministry of Finance to ensure only validated claims qualified for payment.

The ministry said the payments, approved by Finance Minister Taiwo Oyedele, cover contractors working with various Ministries, Departments and Agencies (MDAs).

In a statement issued on Monday by the minister’s Senior Special Assistant on Communication and Press Secretary, Mary-Ann Duke, the government said the latest round of payments prioritised contractors with verified claims of ₦100 million or less.

The ministry noted that the move is designed to provide immediate financial relief to businesses, particularly indigenous firms and small and medium-sized enterprises, enabling them to return to project sites, pay workers, settle suppliers and meet other financial obligations.

It disclosed that more than ₦700 billion in verified obligations owed to local contractors has been processed in recent months. Within May alone, about ₦436.6 billion in transactions were completed, reflecting an accelerated effort to settle outstanding government liabilities.

Officials said the strategy of paying a larger number of smaller contractors rather than concentrating funds among a few major beneficiaries would spread the economic benefits across sectors and regions.

The government expressed confidence that the payments would strengthen trust among contractors, suppliers and service providers working with public institutions by demonstrating a commitment to honouring verified obligations.

The ministry added that reducing outstanding liabilities would help improve public financial management, support economic recovery and enhance the delivery of infrastructure and public services nationwide.