The Federal Government has earmarked N1.8 trillion in the 2026 budget to clear outstanding payment obligations owed to contractors executing federal capital projects across the country.

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, disclosed that the provision is part of the administration’s efforts to restore confidence in government contracting, stabilise the construction sector and accelerate infrastructure delivery.

According to Edun, the allocation is designed to settle verified arrears owed to contractors for completed and ongoing projects, some of which have remained unpaid for several fiscal years. He noted that addressing the backlog is critical to improving budget credibility and preventing further delays in project execution.

A portion of the funds has been set aside for payments to indigenous contractors, in line with the government’s policy of supporting local capacity and strengthening domestic participation in national infrastructure development.

The move is also expected to unlock stalled projects in key sectors such as roads, rail, power and public works, while easing financial pressure on contractors and safeguarding jobs within the construction value chain.

Edun reaffirmed the commitment of the Tinubu administration to prudent fiscal management, adding that timely settlement of contractor obligations will enhance transparency, improve service delivery and support sustainable economic growth.