Unpaid Contractors and the Systemic Collapse of Nigeria’s Procurement Integrity
Unpaid Contractors and the Systemic Collapse of Nigeria’s Procurement Integrity
By Mohammed Bougei Attah
Report Expanded & Evidenced by the Editorial Desk, TipsNews.info
Dateline: Abuja, Nigeria
A dramatic scene unfolded at Nigeria’s National Assembly on November 4, as hundreds of unpaid local contractors barricaded the complex, demanding settlement for projects executed for the Federal Government. In an unprecedented move, the House of Representatives adjourned sitting for one week in solidarity with the protesters—a powerful political statement highlighting the severity of a crisis that strikes at the very heart of public trust and governance.
The decision followed a motion of urgent public importance moved by Rep. Kabiru Mai-Palace (Gusau/Tsafe Federal Constituency, Zamfara), who urged the House to suspend sittings until the executive arm fulfills its promise to pay contractors owed for projects from the 2024 and 2025 budgets.
This protest is not an isolated incident but a symptom of a deep-seated malaise. One of the most persistent challenges crippling Nigeria’s public procurement system is the culture of unpaid or indefinitely delayed payments to contractors. While it appears as a mere administrative failure, its implications are profound, cutting across legality, economic stability, and the very integrity of the state.
The Legal Framework: A Law Honored in the Breach
The legal position is unequivocal. Under Nigeria’s Public Procurement Act (PPA) 2007, once a contract is duly awarded, executed, and certified, the procuring entity is under a statutory obligation to make prompt payment.
- Section 35 of the PPA 2007 explicitly states: “All payments for the procurement of goods, works, and services shall be made promptly and in accordance with the terms and conditions of the contract.”
- It further mandates that in the event of delay, the procuring entity “shall pay interest at the rate specified in the contract.” Where no rate is specified, the Act empowers the Minister of Finance to determine one.
Read the Public Procurement Act 2007 here.
The intent of this law is clear: to enforce financial discipline, protect contractors from arbitrary financial loss, and build trust in public contracting. However, this provision is routinely ignored, transforming a legal safeguard into a testament to governmental impunity.
The Evidence of Failure: Data and Reports
The scale of this problem is documented by several official and independent sources:
- Budget Implementation Reports: The Q1 2024 Budget Implementation Report from the Budget Office of the Federation often reveals a significant gap between contractual obligations and actual cash disbursements. While billions are committed to projects, the actual release of funds is a fraction of the requirement, leading to accumulated debts.
- Debt Management Office (DMO) Data: The DMO regularly reports on the Federal Government’s “Promissory Programme”—a scheme designed to clear inherited liabilities to contractors. The very existence of this program is an admission of systemic failure. As of 2023, the programme was dealing with debts totaling over N3.7 trillion from previous years.
- NEITI Audit Reports: The Nigeria Extractive Industries Transparency Initiative (NEITI) has consistently highlighted delayed payments to contractors in the oil and gas sector as a major inefficiency, leading to project cost overruns and disputes that cost the nation billions.
- World Bank’s CPIA Report: The World Bank’s Country Policy and Institutional Assessment (CPIA) for Nigeria often scores the country low on “Transparency, Accountability, and Corruption in the Public Sector,” with inefficient public procurement and payment delays cited as key contributing factors.
- Source: World Bank – CPIA Africa
The Ripple Effect: From Contractors to National Crisis
The consequences of non-payment are catastrophic and multi-layered:
- Economic Paralysis: Small and Medium-sized Enterprises (SMEs), which form the backbone of the contracting community, are pushed into insolvency. This leads to job losses, reduced tax revenue, and a contraction of the economy.
- Project Abandonment: Critical infrastructure projects—roads, schools, hospitals—remain abandoned, directly impacting the quality of life for citizens and undermining national development.
- Erosion of Trust: As noted by Attah, this practice discourages serious private sector participation. Qualified contractors become wary of government jobs, leaving the field open to less scrupulous entities, thereby degrading the quality of public works.
- Increased Cost of Governance: The accumulation of interest on delayed payments, as mandated by law, unnecessarily inflates the cost of projects, creating a further burden on the national treasury.
A Call for Enforcement, Not Just Legislation
The Bureau of Public Procurement (BPP), established to oversee this process, must move beyond merely reviewing contracts to actively enforcing Section 35 of the PPA. This includes:
- Naming and Shaming Defaulting MDAs: Publicly listing ministries, departments, and agencies that consistently delay payments.
- Enforcing Interest Payments: Mandating and auditing the payment of interest on delayed invoices, as the law demands.
- Linking Budgetary Allocation to Performance: Ensuring that no MDA is allowed to initiate new contracts if it has a history of failing to settle valid existing obligations.
The recent bill sponsored by the Speaker of the House of Representatives to penalize contractor defaults is a step in the right direction, but it must be matched by an equal and unequivocal commitment to holding the government accountable for its own defaults.
Conclusion: A Test of Governance
The one-week adjournment of the National Assembly is a powerful political signal, but it must be followed by relentless legislative oversight. Nigeria cannot continue to demand performance from its contractors while abdicating its own fundamental legal and financial obligations.
Upholding the principle of prompt payment is not an administrative formality; it is a fundamental test of the government’s integrity, its respect for the rule of law, and its commitment to building a functioning state. The unpaid contractors at the gates of the National Assembly are not just creditors; they are canaries in the coal mine of Nigeria’s governance system. Their plight is a direct reflection of the system’s health, and the diagnosis is alarming.
Mohammed Bougei Attah is a social worker, procurement professional, and the National Coordinator of Procurement Observation and Advocacy Initiative. This report was expanded with additional evidence and analysis by the Editorial Desk of TipsNews.info.
