President Bola Tinubu on Wednesday established a high-level, multi-ministerial committee to urgently resolve the substantial backlog of outstanding payments owed to federal contractors, a debt estimated at approximately ₦1.5 trillion and impacting over 2,000 entities.
The directive followed a Federal Executive Council (FEC) meeting where the President expressed "grave displeasure" over the persistent issue, according to a statement from the State House.
The committee is tasked with developing a clear funding plan and addressing the systemic issues that have led to the prolonged payment delays.
The move comes amid mounting pressure and public protests from indigenous contractors demanding the settlement of certified debts for completed infrastructure projects.
Bayo Onanuga, the President's Special Adviser on Information and Strategy, confirmed the development to journalists in Abuja.
He stated that the President was "very, very upset" after the Director-General of the Bureau of Public Procurement (BPP) briefed the council on the scale of the legacy debt.
“He made it very, very clear he is not happy and wants a one-stop solution,” Onanuga said, adding that the President emphasised the importance of the country honouring its financial obligations.
The newly formed committee comprises key economic and infrastructure ministers, including the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Minister of Budget and Economic Planning, Atiku Bagudu; and the Minister of Works, David Umahi.
The leadership of the Federal Inland Revenue Service (FIRS) and the Budget Office of the Federation are also on the panel, ensuring a comprehensive review of both revenue and expenditure management.
The issue of unpaid contractor arrears is a long-standing challenge in Nigerian public finance, often attributed to budgeting practices that lead to project funding carry-overs and subsequent cash-backing failures.
The Works Ministry, in particular, had previously launched a verification exercise earlier this year to address a backlog of roughly N1.5 trillion owed specifically on federal highway contracts.
The budget execution process has been complicated by the necessity of running overlapping budgets, with the capital components of previous years frequently extending into the current fiscal year.
This fiscal strain is occurring even as the government has reported improved revenue generation from agencies like the FIRS.
