Centre for Economic Justice and Social Equity (CEJSE), a civil society organisation, has accused the Ministry of Finance and the Office of the Accountant-General of the Federation of being administratively incompetent and negligent in their persistent failure to pay verified contractors who have carried out government projects all over Nigeria.
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The report highlighted the fact that small businesses are being hit hard, unemployment is on the rise, and public trust is being eroded as a result of the federal government’s persistent failure to settle contractual commitments.
On Thursday, CEJSE issued a statement signed by its president, Dr. Ibrahim Okehi Omeiza, warning that the persistent nonpayment or reluctance to pay properly certified contractors is becoming a lethal infection in Nigeria’s economy.
Contractors, he emphasised, are essential to a country’s economic growth. They provide construction services, as well as being employers. Layoffs, loan defaults, and the collapse of local economies are consequences of being overdue for months—and even years.
According to Omeiza, this is an example of economic unfairness because many of the impacted contractors took out loans from Nigerian banks at exorbitant interest rates to finish government projects, but then ran into payment roadblocks.
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Dr. Omeiza criticised the practice, calling it “unconscionable” that contractors are treated like beggars after performing their obligations under a legally bound agreement.
There is a moral dimension to this problem as well as a financial one. The public deserves an explanation from the Minister of Finance and the Accountant-General regarding this pattern of disregard and delay. We are now dealing with systemic problems. This is a catastrophic, systemic, and intentional problem.
All too often, individuals fail to remember how these delays impact actual people’s lives. Workers are sent home when a contractor closes down because they have not been paid.
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Supply markets for construction materials are impacted. Whole families go famished. The kids aren’t going to class anymore. The utter silence of important government leaders is adding fuel to the chain reaction of despair.
In spite of several follow-ups and recorded permissions, some contractors with fully performed and authorised projects have waited as long as 18 months without receiving a single payment, according to CEJSE.
“We are not unmindful of Nigeria’s fiscal challenges,” it said, expressing worry that the allocated monies for these contracts were being withheld or diverted without accountability, even though the cash had already been disbursed.
Payment, however, follows the allocation of funds, the awarding of contracts, and the completion and verification of tasks. It is necessary to destroy that process if it is being impeded by ineptitude, bureaucracy, or corruption. Our remaining economic credibility can only be safeguarded in this manner.
Continuously delaying payments would discourage future investment and harm public-private sector relations, CEJSE said, making a direct appeal to the government’s conscience.
“Without a reliable system for contractors, it is impossible to construct the nation’s infrastructure. When rules are subject to change in the middle of a game and due process is compromised in favour of personal interests or political manoeuvring, no partner, domestic or foreign, will want to work in such an environment. The statement went on to say that it is unjust and unsustainable.
In addition to promising to rally other civic and legal players to protect impacted companies, the group dropped hints that civil and legal actions could be considered if the situation continues.
Our goal is to provide this administration one last chance to fix things, says the head of the CEJSE. However, we will take this problem to the courts and public opinion if the Finance Minister and Accountant-General do not promptly act and disclose transparently why these payments are being delayed.
A public audit of the pattern of delays was demanded by CEJSE, and a pledge to overhaul the systemic processing of contractor payments across ministries and agencies was made. All contractors who have finished and certified their projects should have their outstanding payments released immediately.