State governments' unpaid bills strain Nigerian businesses
State governments in Nigeria owe contractors approximately N754.4bn in unpaid bills, based on BudgIT's State of States Report 2026.
In Brief
- •State governments in Nigeria owe contractors approximately N754.4bn in unpaid bills, based on BudgIT's State of States Report 2026.
- •Benue has the highest contractor obligations at N121.69bn, followed by Kwara with N97.91bn and Gombe with N72.95bn.
- •Delayed payments force businesses to continue operating with limited liquidity, affecting workers, suppliers, and communities.
- •The Federal Government is also dealing with significant outstanding contractor claims, totaling more than N4tn.
Why It Matters
The unpaid bills by state governments are creating significant liquidity pressures on Nigerian businesses, particularly smaller firms with limited access to credit. This situation can lead to operational disruptions, job losses, and economic inefficiencies. The problem highlights broader issues in public financial management and the need for better cash-flow planning and execution in government projects.
Key Details
- Total Contractor Arrears
- N754.4bn
- Highest Contractor Obligations
- Benue (N121.69bn)
- Second Highest Contractor Obligations
- Kwara (N97.91bn)
- Third Highest Contractor Obligations
- Gombe (N72.95bn)
- Federal Government Outstanding Claims
- More than N4tn
Context & Background
State governments in Nigeria have been grappling with significant financial challenges, including unpaid bills to contractors and outstanding pension obligations. This issue has been exacerbated by the need to manage public projects and services without sufficient funds.
Original Reporting & Sources
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