By Mohammed Bougei Attah
On November 4, the Federal House of Representatives in whole, adjourned sitting for one week in solidarity with unpaid contractors. This was reported in some main stream media in the country. The Contractors, hundreds in number, barricaded the National Assembly entrance in protest over the Federal Government’s failure to settle outstanding debts.
The decision to adjourn sitting followed a motion of urgent public importance moved by Rep. Kabiru Mai-Palace representing Gusau/Tsafe Federal Constituency in Zamfara. He urged the House to suspend sittings until the executive arm fulfils its promise to pay local contractors owed for projects executed under the 2024 and 2025 budgets
One of the most persistent challenges confronting Nigeria’s public procurement system today is the issue of unpaid or delayed payments to contractors. While this problem may appear administrative, its implications run deep — cutting across legality, governance, and public trust.
Under the Public Procurement Act (PPA) 2007, once a contract is duly awarded, executed, and certified for payment, the procuring entity is under a statutory obligation to make prompt payment in line with the contract terms. Any delay or refusal to do so constitutes both a breach of the contract and a violation of the procurement law. Unfortunately, this legal requirement is often ignored by public officials who fail to appreciate the far-reaching damage it causes.
Section 35 of the Public Procurement Act (PPA) 2007 deals specifically with payment for procurement of goods, works, and services, and provides clear guidance on timely payment and interest on delayed payment.
Section 35 of the PPA 2007 under Payment of Contract Sums demands that “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” and in the event of delay in payment, the purchaser shall pay interest at the rate specified in the contract for the period of delay.
Further, it says “Where no rate is specified, the Act provides that the Minister of Finance shall, by regulation, determine the applicable rate of interest for delayed payments”
The interpretation and implications of the above law is to enforces financial discipline and fairness in public procurement. It protects contractors and suppliers from financial losses arising from government payment delays.
Ministries, Departments, and Agencies (MDAs) are legally bound to honour payment obligations within agreed timelines. If they default, interest must accrue on outstanding amounts — either as stated in the contract or as determined by the Minister of Finance.
In practical terms, Section 35 ensures that Contractors can claim interest on delayed payments, strengthening trust and efficiency in public contracting. Procuring entities cannot unilaterally delay payment without financial consequence.
This argument or position of law supports the recent Bill to make Contractors pay certain penalties for defaults, such as delay in execution of projects after mobilization or payment. What has become of the Bill sponsored by the Speaker of the House of Representative is what the public is yet to know.
When contractors remain unpaid, projects are stalled, businesses suffer, and jobs are lost. It discourages private sector participation and undermines competition — key pillars of an efficient procurement system. In many cases, unpaid contracts are carried over into subsequent fiscal years as contingent liabilities, thereby distorting public accounts and weakening budget credibility.
Beyond the financial strain, unpaid contractors face operational paralysis, loan defaults, and reputational damage. The ripple effect extends to the credibility of the government itself, as non-payment erodes confidence in the fairness and transparency of the procurement process.
The Bureau of Public Procurement (BPP) and its state-level counterparts must therefore enforce compliance with Section 35 of the PPA, which mandates that no contract be awarded without available funds and that payments be made promptly. This provision is not a suggestion—it is a legal safeguard against abuse and inefficiency.
Nigeria cannot continue to demand performance from contractors without fulfilling its own obligations. Timely payment is not a privilege; it is a right guaranteed by law and an essential element of good governance. Upholding this principle is crucial to restoring integrity, encouraging fair competition, and building public confidence in the nation’s procurement system.
Failure to pay contractors on time under procurement regulations is both a contractual and statutory breach. It undermines transparency, weakens market confidence, disrupts project delivery, and exposes government agencies to legal, financial, and reputational risks.
Prompt payment is therefore essential to uphold procurement integrity, encourage fair competition, and sustain trust between the public and private sectors.
Attah is a social worker, procurement professional and currently the National Coordinator of Procurement Observation and Advocacy Initiative.