FG Set to Clear Verified Contractor Payments and Wage Arrears Amid Dual Budget Implementation
The Federal Government of Nigeria has confirmed that it will begin the process of clearing outstanding payments owed to contractors who have duly completed and verified projects across various Ministries, Departments, and Agencies (MDAs). This announcement comes amid ongoing fiscal adjustments and dual budget operations for the 2024 and 2025 fiscal years.
According to a statement released on Tuesday by Bawa Mokwa, Director of Press and Public Relations at the Office of the Accountant-General of the Federation (OAGF), only contracts that were awarded through due process and completed according to official specifications will be honored.
“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,” the OAGF stated.
This move is aimed at promoting fiscal discipline, ensuring transparency, and restoring contractor confidence, especially after months of delayed payments. The government also made it clear that no payments will be made without proper documentation, in line with public procurement and accountability standards.
In addition to contractor payments, the Federal Government is also continuing with the phased payment of the N35,000 wage award arrears to civil servants. The wage award was introduced as a palliative measure following the removal of fuel subsidies, to cushion the financial burden on public sector workers amid economic reforms.
“The next payment of the N35,000 wage award will be done in June 2025 after payment of the June 2025 salary,” Mokwa confirmed, adding that arrears payments began in May and will continue monthly until fully cleared.
The National Assembly has also expressed concerns about the disparity between recurrent and capital expenditures in the 2024 budget. Lawmakers highlighted that capital projects, which directly impact infrastructure and development, have suffered due to low fund releases.
During a joint session between the Senate and House Committees on Appropriations and the Presidential Economic Team, Senator Solomon Adeola and Abubakar Bichi urged the Federal Government to increase capital funding. They argued that while recurrent expenses only serve a limited portion of the population, capital projects benefit the broader Nigerian public through infrastructure and service delivery.
In response to the delays in capital project execution, the National Assembly has extended the implementation period for the capital component of the 2024 budget until December 31, 2025. This marks the second time the budget has been extended and has resulted in a rare occurrence—two national budgets running concurrently.
Currently, ministries and agencies are operating under the 2024 budget, even though the 2025 budget has already been passed and is officially in force. This overlap has caused operational delays and complications in fund disbursement.
A government source, speaking to The PUNCH, confirmed that despite the approval of the 2025 budget, most financial operations across MDAs are still being carried out under the extended 2024 fiscal plan. This dual implementation has led to widespread payment delays for contractors and workers.
With the latest assurance from the Office of the Accountant-General, stakeholders are hopeful that the new approach will speed up payments, enhance project delivery, and improve trust in government processes, especially at a time when economic recovery and fiscal responsibility are high on the national agenda.