Nigeria’s Senate has approved a $21 billion foreign loan package proposed by President Bola Tinubu to fill a wide budget shortfall and finance infrastructure projects in 2025, as the West African nation contends with inflation, currency pressure and sluggish growth.

The borrowing plan, endorsed by lawmakers, is expected to be sourced from a mix of multilateral institutions such as the World Bank and African Development Bank, as well as bilateral lenders. A portion of the funds may also be raised through foreign-currency bond, according to Africa News.

The Tinubu administration argues that the borrowing is essential to drive investment in sectors including transport, education, and healthcare, amid persistently low government revenue and a sharp decline in oil earnings.

The approval comes as Nigeria, Africa’s most populous country, grapples with annual inflation above 30% and a steep devaluation of the naira. Economic reforms introduced under Tinubu — including the removal of fuel subsidies and exchange rate liberalization — have so far had limited success in easing fiscal pressures.

Analysts say the new loans could push Nigeria’s external debt closer to unsustainable levels unless accompanied by stronger revenue mobilization. The country’s debt service costs already absorb a large share of its budget, raising questions about long-term fiscal stability.

The loan package still requires approval from the House of Representatives before implementation.