Senate forms committee to work with FG on unpaid debts to contractors

The Senate on Tuesday set up a six-member committee to work with the Federal Ministry of Finance. The goal is to help pay local contractors who are owed money for capital projects across Nigeria.

Senate President, Godswill Akpabio, revealed the committee's makeup during the plenary session. Most senators supported this move with voice votes.

Mr Akpabio said the committee will be led by the Chairman of the Senate Committee on Finance, Sani Musa (APC, Niger East).

The other members include Adetokunbo Abiru (APC, Lagos East), Kawu Sumaila (APC, Kano South), Abubakar Sani Bello (APC, Niger North), Isah Jibrin (APC, Niger East), and Abdullahi Yahaya (APC, Kebbi Central).

The Senate President instructed the committee to submit its report in one week. The report should detail what the federal government is doing about the outstanding debts to the contractors.

The decision to form this committee comes after various protests from contractors demanding payments for their capital projects around the country. These contractors are part of the All Indigenous Contractors Association of Nigeria (AICAN).

They have claimed that the federal government owes them about ₦4 trillion for projects completed, especially those under the 2024 budget. Government officials have given different figures regarding these debts.

The government insists that a significant part of the verified claims has been paid. They also say that remaining debts are still being checked and will be paid in phases.

The dispute over these debts has led to many protests in Abuja since 2025. Contractors have often occupied the Federal Ministry of Finance and blocked access to the ministry. They accuse government officials of not keeping their promises to release funds for completed projects.

Many contractors have taken loans from banks to finish government contracts. They say the delayed payments have made it hard for them to repay these loans. Some have even faced loan defaults, business closures, and asset seizures by banks.

In response, the federal government has announced several plans to clear the backlog of payments. Former Minister of Finance, Wale Edun, mentioned before he left office that over ₦2 trillion in capital debts had been paid. The ministry also confirmed that ₦152 billion was released to contractors after verification.

The government has included provisions in future budgets to tackle outstanding debts. They are also holding talks with contractors’ representatives to settle these payments in phases.

Despite these efforts, the situation remains a big issue because it affects the economy. Delays in paying contractors can slow down infrastructure projects. This can also raise the costs of government projects due to interest and inflation, weakening local construction firms.

The controversy is even more intense as the federal government looks for new loans to support budget deficits and infrastructure work. Government officials keep saying that borrowing is essential for funding ongoing projects and boosting economic growth while settling outstanding debts based on available funds and verification processes.