The Federal Government has approved payment to more than 1,240 local contractors as part of efforts to settle verified obligations, stimulate economic activities and support indigenous businesses across the country.

The approval was granted by the Federal Ministry of Finance following a comprehensive verification and reconciliation process aimed at ensuring that only duly validated claims qualified for payment.

According to a statement issued by the Ministry on Monday, the payments cover contractors engaged by various Ministries, Departments and Agencies (MDAs) and are expected to provide immediate liquidity support to businesses, particularly small and medium-sized enterprises (SMEs).

The Ministry explained that contractors with verified claims of ₦100 million and below were prioritised in the latest batch of payments, a move designed to broaden the impact of the intervention and support a larger number of businesses.

The Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, said the initiative reflects the Federal Government’s commitment to meeting its financial obligations while promoting economic recovery and growth.

The statement noted that the release of funds would enable contractors to return to project sites, pay workers’ salaries, settle outstanding debts to suppliers and fulfil other financial commitments.

According to the Ministry, the latest disbursement forms part of a broader effort by the Federal Government to address inherited liabilities and strengthen confidence in public financial management.

It disclosed that over ₦700 billion in verified obligations owed to local contractors had been processed and paid in recent months.

The Ministry further revealed that approximately ₦436.6 billion worth of transactions were processed in May alone, underscoring what it described as a significant acceleration in payment activities aimed at unlocking liquidity within the economy.

Officials said the government’s decision to prioritise smaller contractors rather than concentrate payments among a few large beneficiaries would ensure that the economic benefits are felt across different sectors and regions of the country.

The Ministry expressed optimism that the payments would boost confidence among contractors, suppliers and service providers doing business with government institutions.

For many of the beneficiaries, the release of funds is expected to provide much-needed financial stability, preserve jobs, facilitate project completion and contribute to overall economic expansion.

The Ministry reaffirmed its commitment to fiscal discipline and prudent management of public resources, assuring stakeholders that efforts would continue to ensure timely settlement of legitimate obligations while reducing outstanding liabilities.

It added that the strategy is aimed at strengthening confidence in government contracting processes, improving service delivery and supporting infrastructure development across the country.