President sets up high-level ministerial panel to clear ₦1.5bn legacy debt
President Bola Tinubu has expressed deep dissatisfaction and displeasure over the enormous backlog of debt owed to federal contractors across the country. The total debt is estimated to be approximately ₦1.5 billion and affects over 2,000 contractors who have completed work for the Federal Government.
The President’s outrage was reported following a session of the Federal Executive Council (FEC) meeting held at the Presidential Villa in Abuja.
Consequently, President Tinubu has immediately set up a high-level, multi-ministerial committee with the express mandate to resolve the logistical and financial bottlenecks. The primary goal of the committee is to quickly find and allocate the funds necessary for the repayment of these outstanding debts. The President emphasized that he wants a “one-stop solution” to this persistent and embarrassing issue.
DG of BPP briefed FEC on magnitude of legacy debts
President Tinubu’s displeasure was disclosed by his Special Adviser on Information and Strategy, Bayo Onanuga, while briefing State House correspondents after the FEC meeting. Onanuga, who stood in for the Minister of Information and National Orientation, Mohammed Idris, confirmed that the President was clearly “very, very upset” upon hearing the details. The magnitude of the legacy debts was brought to the Council’s attention by the Director-General of the Bureau of Public Procurement (BPP), Dr. Adebowale Adedokun.
Dr. Adedokun informed the FEC that around 2,000 contractors were currently being owed money by the Federal Government. This disclosure immediately triggered the President’s directive to the ministers to address the problem comprehensively. The President stressed that as a sovereign country, Nigeria must honor its contractual obligations to its citizens and businesses.
Multi-ministerial committee set up to develop repayment plan
The high-powered committee established by the President is composed of several key members of his cabinet, representing strategic sectors of the economy. The committee includes the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and the Minister of Budget and Economic Planning, Atiku Bagudu. Also on the panel are the Ministers of Works, Dave Umahi; Education, Olatunji Alausa; Housing, Ahmed Dangiwa; and Marine & Blue Economy, Gboyega Oyetola.
Technical support for the committee will be provided by the Director-General of the Budget Office of the Federation, Tanimu Kurfi, and the Chairman of the Federal Inland Revenue Service (FIRS), Dr Zacch Adedeji. Bayo Onanuga explained that the committee’s mandate is to sit down, develop a concrete plan, and present a financing solution to the President for the immediate payment of the contractors. The committee’s ultimate goal is to “find the money and fix the problem.”
President explores borrowing option to settle outstanding arrears
The President expressed his commitment to resolving the problem quickly, even going as far as suggesting the possibility of borrowing funds to settle the contractors. He highlighted the fundamental need to understand the root cause of the problem, questioning why the nation is owing contractors despite the FIRS reporting an increase in revenue collection. This holistic approach aims to ensure that such a backlog does not recur in the future.
The administration views the issue as an ethical and economic failure that must be corrected urgently to instill confidence in government dealings. The widespread complaint from contractors, who have been decrying delays in payment for jobs completed since the previous year, has created immense pressure on the government. Earlier in September, the All Indigenous Contractors Association of Nigeria had protested the non-payment of arrears for certified capital projects, citing billions in outstanding payments.
Legacy debts and budget carry-overs complicate execution
The challenge of settling the ₦1.5 billion debt is further complicated by existing legacy debts and systemic budget execution issues. The Works Ministry had previously acknowledged a significant backlog, initiating a verification drive to clear roughly ₦1.5 trillion owed solely on federal highway contracts. This larger figure indicates the scale of the financial hole the government is attempting to fill.
Furthermore, budget execution has been complicated by the practice of carrying over components from previous fiscal years. Nigeria has been running overlapping budgets, extending capital components deep into the succeeding year. The establishment of the multi-ministerial committee signals the President’s determination to address both the immediate payment crisis and the underlying structural issues causing these perennial problems.
