The Federal Government has earmarked N1.7 trillion in the proposed 2026 Appropriation Bill to settle outstanding payments owed to contractors for capital projects executed in 2024. This allocation is captured under the budget line item titled “Provision for 2024 Outstanding Contractor’s Liabilities,” indicating official acknowledgment of persistent payment delays.

The move comes amid mounting pressure from indigenous contractor groups and civil society organisations, which have repeatedly raised concerns about large sums owed for completed work. In 2025, protests broke out in Abuja over delayed settlements, with some groups estimating that outstanding obligations could exceed N2 trillion.

In addition to the N1.7tn provision, the government has included N100 billion in the 2026 budget under a separate line item for “Payment of Local Contractors’ Debts/Other Liabilities.” This amount is expected to cover smaller claims, legacy debts from previous years, or obligations not fully verified within the current audit cycle.

Together, the N1.8tn allocation forms part of the broader N23.2tn capital expenditure component of the 2026 national budget. The capital plan aims to accelerate infrastructure delivery while addressing accumulated liabilities from past projects.

Contractor payment delays have been a recurring challenge in Nigeria’s fiscal landscape, often attributed to slow capital releases, partial cash-backing of budgeted expenditures, and revenue shortfalls. In response to protests and persistent complaints, President Bola Tinubu established a high-level inter-ministerial committee tasked with verifying contractor claims and recommending sustainable solutions for clearing the backlog of unpaid debts.

Officials from contractor associations have highlighted that many federal contractors remain owed substantial sums, which have hindered their ability to meet financial commitments such as servicing bank loans taken to execute government contracts. Recent demonstrations indicated that more than N500 billion was owed to indigenous contractors for work completed and certified in 2024.

The inclusion of the N1.7tn line item in the 2026 budget reflects an attempt by the government to address these concerns more comprehensively, following partial payments and assurances that earlier deadlines for clearance would be met.

Overall, the proposed N58.47tn 2026 national budget allocates funds across key sectors, with N23.2tn for capital projects, N15.9tn for debt servicing, N15.25tn for recurrent expenditures, and N4.09tn for statutory transfers, signalling continued efforts to balance infrastructure development with fiscal obligations.