By DIENIBO KAL
Teaser:
Contractors have waited too long. Tinubu’s payment reforms aim to restore transparency, discipline, and trust in Nigeria’s public projects.
When President Bola Tinubu assumed office, he inherited a contractor payment system burdened by arrears, opacity and excessive discretion. By late 2025, official estimates placed outstanding federal obligations at roughly ₦1.5 trillion, while contractor associations insisted the figure could be significantly higher. Behind those numbers were completed roads, public buildings and infrastructure projects — and thousands of indigenous contractors waiting, sometimes desperately, to be paid.
For years, one of the most corrosive weaknesses in the system was the broad discretionary authority exercised by heads of Ministries, Departments and Agencies (MDAs). In principle, government is a continuous institution whose commitments survive changes in leadership. In practice, however, contracts awarded and executed under one administration of an agency could be stalled, questioned or quietly set aside by a successor. The power to pay often rested not on transparent institutional process, but on individual judgment.
The consequences were severe and deeply human. Contractors frequently financed government projects through bank loans, pledging homes, land and other personal assets as collateral. When payments were delayed indefinitely, businesses collapsed, properties were forfeited and reputations were damaged. Within the contracting community, there are credible accounts of irreversible financial losses and profound personal hardship linked to prolonged non-payment. A discretionary culture did not merely distort public accounting; it eroded trust in the Nigerian state.
The decision to centralise contractor payments is intended to correct that structural flaw. By placing verification and disbursement under tighter Treasury supervision, the reform reduces the ability of any single MDA head to arbitrarily withhold settlement. Once a project is properly verified and recorded at the centre, payment becomes a federal obligation rather than a matter of personal preference.
Under the evolving framework, stricter validation processes precede disbursement, and Authorities to Incur Expenditure are to be centrally issued before legal commitments are finalised. The governing principle is straightforward: no confirmed funding, no contract; no verified claim, no payment. This shift is designed to halt the cycle of unfunded commitments that historically produced mounting arrears and fiscal uncertainty.
Equally important, the reform clarifies institutional roles. MDAs are expected to concentrate on their core mandates — project identification, procurement compliance, supervision, monitoring and certification. Financial settlement rests with central authorities. By separating operational oversight from cash control, the government aims to strengthen accountability while enabling agencies to focus on delivery rather than discretionary payment decisions.
Sceptics argue that additional verification layers risk slowing payments for already distressed contractors. That concern is legitimate. Reform must not degenerate into paralysis. Yet returning to a system defined by unchecked discretion would only reproduce inflated claims, unfunded contracts and recurring debt cycles.
Ultimately, Nigeria’s fiscal credibility depends not merely on announcing projects, but on honouring obligations transparently and consistently. Moving from discretion to discipline is more than administrative housekeeping; it is a necessary step toward restoring trust between government and those who build its infrastructure.