Nigeria’s Senate has approved President Bola Tinubu’s plan to borrow over 21 billion dollars from foreign and domestic sources to bridge gaps in the 2025 national budget. The move is aimed at supporting spending on infrastructure, health, education, security and housing, despite growing concerns about rising inflation and public debt.
Solomon Adeola, chair of the Senate’s appropriations committee, confirmed the approval late on Tuesday. “With this approval we now have all revenue sources, including loans, in place to fully fund the budget,” he told reporters.
The borrowing includes loans of 4 billion euros, 15 billion yen, a 65 million dollar grant, and an additional 2 billion dollars to be raised through local debt markets. Among the key projects to be financed is the rehabilitation of a 2,044 kilometre rail line along the eastern corridor, with 3 billion dollars earmarked for the upgrade.
The plan is expected to receive backing from the House of Representatives on Wednesday, clearing the way for its execution.
Since coming to power in 2023, Tinubu has embarked on sweeping economic reforms. He removed costly fuel subsidies and allowed the naira to trade more freely on currency markets, steps aimed at reducing fiscal pressure and attracting investment. However, these policies have instead driven up inflation and worsened a cost of living crisis for many households.
The borrowing signals a shift in the administration’s economic strategy. While early reforms leaned toward fiscal restraint, the government is now opting for expansionary spending to boost growth, even as revenues remain weak. The emphasis on infrastructure and public services reflects an effort to counterbalance the economic strain with long-term investment.
Critics have warned that increasing debt without significant revenue growth could leave the country more vulnerable, especially with a growing portion of the budget being used to service loans. Nigeria has struggled with sluggish tax collection and fluctuating oil revenues, putting pressure on public finances.
Still, the Tinubu administration is betting that carefully targeted borrowing can lay the groundwork for future economic stability. The success of the plan will depend on how efficiently the funds are spent and whether the investments translate into measurable improvements in productivity and living conditions.
With parliamentary approval in place, attention will now turn to implementation, transparency and the pace at which promised infrastructure and public sector improvements begin to take shape.
