Nigeria's Senate has approved President Bola Tinubu's plan for more than $21-billion in foreign borrowing to plug shortfalls in the 2025 budget, a senior lawmaker said late on Tuesday.

Tinubu asked parliament to approve the borrowing in May.

"With this approval we now have all revenue sources, including loans, in place to fully fund the budget," Solomon Adeola, Senate chair on appropriations, told reporters.

The approval also includes loans of 4-billion euros ($4.70-billion) and 15-billion yen ($102.26-million), a $65-million grant as well as $2-billion dollar-denominated borrowing at home.

The money is earmarked for infrastructure, healthcare, education, security and housing. Some $3-billion has been allocated to revamp a 2 044 kilometre narrow-gauge line along Nigeria's eastern rail corridor.

Since taking office in 2023, Tinubu has initiated bold economic reforms, including ending costly fuel subsidies and devaluing the naira, to stimulate growth. Instead the measures have fuelled inflation and triggered a cost of living crisis.

The borrowing reflects Tinubu's shift toward fiscal expansion to stimulate growth, despite limited revenue.

The House of Representatives is expected to approve the plan on Wednesday.