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

The approval followed a verification and reconciliation exercise conducted by the Federal Ministry of Finance to ensure that only validated claims qualified for payment.

According to the ministry, the beneficiaries include contractors working across various Ministries, Departments and Agencies, with priority given to indigenous firms and small and medium-sized enterprises.

Contractors with verified claims of ₦100 million or less were prioritised in the latest payment round.

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The government said the disbursement would enable many businesses to resume projects, meet payroll obligations, pay suppliers, settle debts and sustain economic activities.

The ministry disclosed that more than ₦700 billion in verified obligations owed to local contractors has been processed in recent months.

In May alone, transactions worth about ₦436.6 billion were completed, reflecting an accelerated payment programme aimed at improving liquidity within the economy.

Officials noted that the strategy of distributing payments across a larger number of smaller contractors would broaden the economic benefits, rather than concentrating funds among a limited number of major firms.

The government expressed confidence that the payments would strengthen trust among contractors and suppliers by demonstrating its willingness to honour legitimate financial commitments.

The ministry added that the release of funds would help businesses maintain operations, protect jobs, complete ongoing projects and contribute to economic growth.

It further stated that efforts to reduce outstanding liabilities would continue as part of broader plans to improve public financial management and enhance the delivery of infrastructure and public services.