The Center for Economic Reforms in Africa (CERA) has expressed concern over the Federal Government's failure to pay local contractors who completed projects under the 2024 budget.
The Centre, in a statement signed by its Director, Dr Martins Tayo, said this development has had serious implications for the Nigerian economy, businesses and families.
According to Tayo, non-payment to contractors has led to significant financial difficulties, including loan defaults and worker layoffs.
He lamented that many contractors are struggling to stay afloat due to the government's inability to meet its financial obligations, creating a domino effect in various sectors and causing a decline in economic activity.
“The impacts of this failure on the economy and businesses are far-reaching. “The lack of payment to contractors has limited their ability to invest in new projects, expand their operations and create jobs,” he added.
“This has also affected the livelihoods of thousands of workers employed by these contractors. The government's failure to pay contractors for completed projects has eroded confidence in the government's ability to manage public finances.
“In addition, non-payment to contractors has also affected the overall economy. Failure to pay contractors has reduced the amount of money in circulation, leading to a decline in economic activity.
“This has also affected the government's ability to generate revenue as many businesses are struggling to survive due to the government's failure to pay its debts. The impacts on families and Nigerians are devastating.
“Many families are struggling to make ends meet due to loss of jobs and income due to the government not paying contractors. The lack of payment has also affected the ability of many Nigerians to access basic needs such as food, healthcare and education.”
Tayo noted that if not addressed, this issue can lead to a decline in investor confidence as local and foreign investors may become wary of partnering with the government due to its poor track record in fulfilling its obligations. financial obligations.
Additionally, he said the government's failure to pay local contractors could also lead to increased social unrest and protests, adding that as more businesses struggle to stay afloat and workers lose their jobs, the fabric social situation of the country may begin to fray.
CERA therefore urged the Federal Government to take immediate action to address this crisis.
The Center recommends prioritizing payment to local contractors for completed projects to increase liquidity and rebuild trust, as well as clear and transparent payment, including a schedule, amount and payment modalities.
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