The Federal Government has approved payments to more than 1,240 contractors as part of efforts to settle outstanding obligations and inject liquidity into businesses across the country.

The development was disclosed in a statement issued on Monday in Abuja by the Head of Information at the Federal Ministry of Finance, Mrs Efe Ovuakporie.

According to the statement, the approval was granted by the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, following a comprehensive verification and reconciliation exercise to ensure that only duly validated claims qualified for payment.

Ovuakporie said the payments cover contractors engaged by various Ministries, Departments and Agencies (MDAs), describing the move as a major step towards clearing long-standing debts owed to businesses, particularly indigenous firms and small and medium-sized enterprises (SMEs).

She explained that contractors with verified claims of N100 million or less were prioritised in the latest round of payments.

“The release of funds is expected to provide immediate relief to hundreds of businesses, enabling them to return to project sites, pay workers, settle suppliers, meet financial commitments and stimulate economic activity across the country,” she said.

Ovuakporie noted that the initiative reflects the ministry’s commitment to implementing government policies through transparent and fiscally responsible settlement of inherited obligations.

She revealed that the Federal Government had processed payments exceeding N700 billion in verified obligations owed to local contractors in recent months.

According to her, about N436.6 billion worth of transactions were processed in May alone, underscoring an accelerated payment drive aimed at boosting liquidity and supporting economic growth.

She added that the government deliberately prioritised a larger number of smaller contractors rather than concentrating payments among a few major beneficiaries, thereby widening the economic benefits of the disbursements across sectors and regions.

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

Ovuakporie said the disbursements would help many businesses sustain operations, retain jobs, complete ongoing projects and contribute to the country’s economic recovery and growth.

She reaffirmed the ministry’s commitment to fiscal discipline while ensuring the timely settlement of legitimate obligations and reducing outstanding liabilities over time.