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By Daniel Adaji
The Federal Government has earmarked a total of N1.8 trillion in the 2026 budget to settle outstanding payments owed to contractors for capital projects executed under the 2024 fiscal year. Of the N1.8 trillion, N100 billion was allocated to local contractors.
Details of the N58.47 trillion 2026 Appropriation Bill, submitted to the National Assembly, show that the debt repayment provision is captured under capital supplementation for the settlement of contractors’ liabilities, as the government seeks to stabilise the construction sector, restore confidence among local firms, and prevent further disruption to public infrastructure delivery.
The proposed repayment comes amidst months of protests by contractors, economic strain within the sector, and warnings that unresolved debts could have political consequences ahead of the 2027 general elections.
Under the budget, total expenditure is projected at N58.47 trillion, with N23.21 trillion allocated to capital expenditure, N15.25 trillion for recurrent non-debt spending, and N15.91 trillion for debt service, while statutory transfers account for N4.09 trillion. The budget is financed through projected revenues of N33.19 trillion, leaving a deficit of N25.27 trillion, to be funded mainly through borrowing and asset sales.
Beyond contractor repayments, the capital budget prioritises road construction, power, agriculture, transportation, housing, education, health, water resources, and defence, reflecting the government’s push to stimulate growth, expand infrastructure, and strengthen social services.
However, the lingering issue of unpaid contractors has remained politically sensitive. The National Forum of APC Young Professionals (NFAYP) recently warned that failure to fully clear the arrears could cost the ruling All Progressives Congress (APC) crucial votes in 2027.
In a statement jointly signed by its National Chairman, Engr. Lukman Adejobi, and Secretary, Dr. Godwin Lukas, the group cautioned that prolonged non-payment had already generated discontent at the grassroots.
“While some payments have been made, our findings indicate that more than N2 trillion is still outstanding. This continued non-payment is not only economically damaging but also politically dangerous for our party,” the statement said.
The forum noted that many indigenous contractors relied on bank loans to execute government projects and that delayed payments had weakened their credit profiles, forced some firms into insolvency, and deepened hardship across the sector.
“These contractors are not just business owners; many are grassroots politicians with families, supporters, and networks capable of mobilising votes. If they are continually neglected, it could affect their willingness to support the APC in 2027,” the group warned.
Speaking at a press conference in Abuja, AICAN National President Jackson Ifeanyi described the situation as “grave injustice.”
“We, the Indigenous Contractors under the auspices of the All Indigenous Contractors Association of Nigeria (AICAN), wish to draw the attention of the Nigerian public, the international community, and all relevant stakeholders to the unfair and unbearable conditions our members are being subjected to by the Federal Government of Nigeria,” Ifeanyi said.
He explained that many contractors executed projects with borrowed funds, trusting government assurances of prompt payment.
“Unfortunately, the Government has failed to honour these contractual agreements but commissioned these projects to look good in the eyes of the public without paying the indigenous contractors who made them possible,” he stated.
Ifeanyi warned that contractors could no longer absorb the economic shock caused by the delays.
“This is grave injustice. This Government continues to lure contractors into projects it has no intention of funding while prioritising projects that serve the personal interests of certain officials,” he said.
He also threatened sustained protests if payments were not made. “We shall embark on continuous demonstrations across the Federal Capital Territory (FCT), displaying our demands and exposing this injustice to the world,” he said.