By Nchetachi Chukwuajah
The Federal Government has earmarked N100 billion in the 2026 budget for the settlement of outstanding debts owed to indigenous contractors across the country.
This was contained in the 2026 Appropriation Bill under the line item titled ‘Payment of Local Contractor’s Debts,’ and signals the government’s effort to address the lingering debts owed to local firms executing public sector projects.
Local contractors, under the aegis of the All Indigenous Contractors Association of Nigeria, embarked on a protest in November 2025 over an alleged N3 trillion debt for contracts executed under the 2024 and 2025 budgets.
The contractors barricaded the entrances to the National Assembly and other federal government offices, vowing to sustain the blockade “for as long as it takes” until payments are made for government projects they claimed to have completed.
The allocation of N100 billion in the proposed 2026 budget to clear the debt owed to local contractors suggests official recognition of the growing financial strain on indigenous contractors, many of whom rely heavily on bank financing to execute government contracts.
The budget breakdowns show that the N100 billion allocation is dedicated solely to clearing arrears owed to Nigerian-owned contracting firms for completed or ongoing government projects.
These debts have accumulated over several years due to funding shortfalls, delayed budget releases, and cash flow constraints faced by the Federal Government.
The allocation also recognises the critical role played by local contractors in Nigeria’s infrastructure development, employment generation, and local content growth.
Delayed payments weaken their balance sheets, reduce their capacity to take on new projects, and increase non-performing loans in the banking sector.
