Title: 2026 Budget: FG Earmarks N1.8tr to Clear Contractors’ Outstanding Payments Date Published: 14 January 2026 Description: The Federal Government has set aside N1.8 trillion to settle outstanding payments owed to contractors handling federal capital projects, according to details of the 2026 Appropriation Bill currently before the National Assembly.Of the total amount, N100 billion has been specifically earmarked for the settlement of debts owed to indigenous contractors, in a move aimed at stabilising the construction sector and restoring confidence among local firms.The payments are expected to cover projects executed under the 2024 fiscal year, many of which were completed but left unpaid due to delayed budget releases and cash flow constraints.Highlights of the 2026 budget proposal show that the Federal Government is prioritising the clearance of contractors’ arrears alongside funding for new and ongoing infrastructure projects, particularly in the transportation sector.A major component of the proposal is rail infrastructure development. The government has proposed N102.3 billion as counterpart funding for Phase One of the Lagos Green Line Metro Rail project, to be implemented under the Ministry of Transportation.The 68-kilometre rail line is designed to run from the Lekki Free Zone to Marina, connecting key commercial and residential areas, including Victoria Island, Lekki and Ajah.The budget also provides N68.5 billion for consultancy services related to the Lekki–Ijebu Ode–Ore–Kajola railway and the coastal rail corridor linking Badagry, Apapa and Tin Can Island ports. The allocation will support project preparation, feasibility assessments and advisory services.Further allocations include N29.04 billion for ongoing and planned railway modernisation projects nationwide. This covers the completion of the Abuja–Kaduna rail line, additional works on the Lagos–Ibadan railway, and rehabilitation of the Itakpe–Ajaokuta rail corridor.The same allocation also provides for the construction of 12 railway station buildings, track-laying works at auxiliary rail facilities in Agbor, as well as the design, manufacture and installation of rolling stock, spare parts and maintenance equipment.In addition, the budget makes provision for signalling and telecommunications systems on the Itakpe–Ajaokuta–Warri rail line, and the deployment of acoustic sensing security surveillance systems along the Abuja–Kaduna corridor.The 2026 proposal further includes funding for feasibility studies on new standard-gauge rail lines, as well as the engagement of transaction advisers for the concession of the Abuja–Baro–Itakpe, Aladja–Warri Port, and Kano–Maradi rail projects.Analysts say the substantial provision for clearing contractors’ debts could help ease tensions in the construction sector, which has witnessed repeated protests over non-payment for completed jobs.Estimates as of June 2025 indicate that the Federal Government owes indigenous contractors between N200 billion and N400 billion, largely due to delayed budget releases, procurement bottlenecks and revenue shortfalls.The National President of the All Indigenous Contractors Association of Nigeria (AICAN), Jackson Ifeanyi, has repeatedly described the delays as a “grave injustice.”He said many indigenous contractors financed government projects with borrowed funds based on assurances of timely payment, only for the government to commission the projects without settling outstanding obligations.According to him, the continued delays have placed contractors under severe financial strain, warning that sustained non-payment could trigger prolonged protests across ministries and agencies.In December 2025, aggrieved contractors blocked the main entrance of a federal ministry in Abuja, restricting vehicular movement and forcing staff and visitors to struggle for access. The protest compelled the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, to meet with the contractors.Following the engagement, the Federal Government paid some contractors, a development that eased tensions ahead of the Christmas holidays. However, the exact amount disbursed was not disclosed, with contractors confirming that while some members had been paid, others were still awaiting settlement.The proposed N1.8 trillion settlement comes amid mounting pressure from contractors and growing concerns that unresolved liabilities could disrupt public infrastructure delivery, with possible political implications as the 2027 general elections draw closer. Attached Images: 5f00fee2cd1b085744e54b4538a87184918d7f7d274b9ab4d1604286f9d1a8d7.jpg Attached Video: None