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Pay Up: LCCI Urges FG to Clear N1.7tn Contractor Debt to Save Indigenous Firms

Business Desk

LAGOS — The Lagos Chamber of Commerce and Industry (LCCI) has issued an urgent call to the Federal Government to immediately settle the ₦1.7 trillion backlog of liabilities owed to contractors, warning that further delays could cripple the indigenous construction sector.

Speaking at the Chamber’s “State of the Economy” press briefing in Lagos on Thursday, the LCCI President, Mr. Leye Kupoluyi, described the debt as a “noose” around the neck of local businesses.

While acknowledging that the Federal Government explicitly earmarked ₦1.7 trillion in the 2026 Budget to settle these verified liabilities, Kupoluyi insisted that “budgeting is not payment.” He urged the Ministry of Finance to ensure timely cash backing to release the funds before the first quarter ends.

“A Formal Acknowledgement is Not Enough”

The LCCI President noted that while the inclusion of the debt in the 2026 budget is a positive “formal acknowledgement” of the problem, the real test lies in execution.

“The Federal Government’s earmarking of N1.7tn reflects that they know the problem exists,” Kupoluyi told business leaders and journalists. “But acknowledgment does not pay bank loans. Indigenous contractors are facing severe financial distress. Many have shut down sites, laid off thousands of workers, and are drowning in high-interest bank debts because the government has not paid them for work done in 2024 and 2025.”

He warned that if the government fails to release the funds immediately, the cost of these projects will likely balloon further due to inflation, currently hovering around 15.15 percent.

AI and The Future

Beyond the debt crisis, the Chamber also challenged the government to look forward. Kupoluyi called on the Tinubu administration to deliberately position Nigeria as a Regional Hub for Artificial Intelligence (AI).

“We cannot just be consumers of technology,” he stated. “The Federal Government must create a national AI framework that integrates infrastructure, skills development, and private sector participation. We have the youth talent to lead Africa in this sector if the policy environment is right.”

Economic Scorecard

Reviewing the general economic landscape for early 2026, the LCCI gave the government a mixed scorecard:

  • FX Stability: The Chamber commended the Central Bank of Nigeria (CBN) for stabilizing the Naira, which appreciated by 6.5% in 2025, and for growing external reserves to $45.5 billion.
  • Inflation: While noting that inflation has decelerated, the LCCI warned that high energy costs and logistics challenges are still squeezing household incomes.
  • Debt Servicing: Kupoluyi flagged the ₦15.52 trillion allocated to debt servicing in the 2026 budget as a “significant fiscal burden” that limits the government’s ability to spend on development.

The Chamber concluded by urging the government to prioritize “execution discipline” in 2026, noting that the time for excuses has passed.