Nigeria's Senate approves President Tinubu's $21 billion Loan Plan

 

Nigeria’s Senate has officially approved President Bola Tinubu’s request to secure over $21 billion in external loans. This move is designed to cover revenue shortfalls in the 2025 national budget. The loan package includes various components such as €4 billion (roughly $4.7 billion), ¥15 billion ($102.26 million), a $65 million grant, and an additional $2 billion borrowed locally in dollars.

The funds are earmarked for critical sectors: infrastructure, education, healthcare, security, and housing. A notable $3 billion chunk will go toward revamping Nigeria’s 2,044-kilometre Eastern narrow-gauge rail line, part of a broader national transportation overhaul.

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Senator Solomon Adeola, chair of the Senate's appropriations committee, stated that the budget is now fully funded with this approval. The package is part of President Tinubu’s broader economic strategy, which includes taking on targeted debt to stimulate national growth and development.

This step comes after Tinubu submitted the request in May 2025, with the House of Representatives expected to give its nod the next day.

Since assuming office in 2023, President Tinubu has launched aggressive economic reforms, including the removal of fuel subsidies and the devaluation of the naira. While intended to stabilize the economy and boost growth, these moves have led to increased inflation, a weakening currency, and widespread hardship among Nigerians.

The new loan strategy reflects a shift toward fiscal expansion, prioritizing investment in national development despite limited domestic revenue. However, the plan raises concerns about Nigeria’s growing debt burden and the long-term impact on public finances.

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Analysts and critics argue that while the loan will help close immediate budget gaps and fund major infrastructure projects, the country must strengthen revenue generation, cut wasteful spending, and manage debt sustainably.

With $1 currently exchanging at about ₦1,525, the naira continues to face pressure in the forex market. Meanwhile, ordinary Nigerians continue to grapple with rising costs of living, food insecurity, and a lack of access to basic services.

The government's challenge now lies in balancing its ambitious spending plans with effective implementation and responsible debt management.