Nigeria’s Unpaid Contractors Spotlight Fiscal Management Challenges Amid Revenue Growth
Nigeria’s Contractors Unpaid Despite Revenue Surge, Obi Highlights Governance Gaps
Nigeria’s local contractors are increasingly highlighting gaps in public finance management, with delayed payments for federal projects sparking protests in Abuja and other regions. Former Anambra State Governor Peter Obi has publicly criticised the Federal Government, underscoring the risks to small and medium-sized enterprises (SMEs) and the broader economy.
The protests come despite the government reporting strong revenue performance for 2025, raising questions about the alignment between federal receipts and expenditure obligations. Contractors report that work completed on public projects in 2024 and 2025 remains unpaid, affecting operational continuity and workforce stability.
SMEs at the Centre of Fiscal Accountability
Obi emphasised that SMEs form the backbone of regional economies, delivering essential public services while relying on timely government payments. The failure to honour these obligations, he noted, could lead to business closures, job losses, and reduced productive capacity.
Analysts note that delayed payments compromise investor confidence and the ability of local enterprises to scale, as these firms often depend on cash flow from government contracts to maintain operations. The situation reflects broader governance challenges in public financial management and accountability.
Revenue Surplus and Governance Discrepancies
The criticism follows official statements that Nigeria exceeded its revenue targets in 2025. While surplus revenue should ideally translate into investment in public services and economic stimulus, the persistence of unpaid contractors indicates gaps in execution and transparency.
Obi highlighted that efficient fiscal management is not only about generating revenue but also about ensuring obligations are met in a timely manner. This, he argued, is a critical measure of government competence and reliability.
Legislative Measures and Government Response
The Federal Government has announced plans to clear verified contractor payments, with extensions granted for the 2024 capital budget to accommodate outstanding obligations. The Office of the Accountant General is reportedly working to process and settle certified projects before the revised deadline of 31 December 2025.
Despite these measures, contractors continue to express frustration, signalling the need for more robust systems to link revenue collection, budget execution, and project completion. Experts argue that strengthening these mechanisms is essential for sustaining SMEs and maintaining confidence in government projects.
Economic Implications
Unpaid contractors represent not just a short-term operational challenge but a structural risk to the economy. SMEs contribute to employment, supply chains, and service delivery; persistent arrears threaten these contributions. In the context of a growing revenue base, timely settlements would not only support businesses but also enhance public trust and encourage private sector participation in national development projects.
Outlook
Nigeria’s contractor payment crisis highlights the broader intersection of fiscal discipline, governance, and SME sustainability. Resolving arrears and institutionalising efficient payment processes is critical for maintaining economic momentum, ensuring social stability, and reinforcing confidence in public finance management.
