CBN blames naira’s woes on $39.6bn spent on foreign education, medical tourism in 10 years

The Central Bank of Nigeria (CBN) has blamed the freefall of the naira on the huge sum of $39.6bn spent by Nigerians on foreign education and medical tourism in 10 years spanning 2010 to 2020.

Olayemi Cardoso

Giving a breakdown, the apex bank disclosed that the sum of $28.6bn was spent on foreign education while foreign medical trips gulped another $11bn within the review period.

The governor of the apex bank, Olayemi Cardoso made this known on Tuesday during a presentation before the House of Representatives.

Cardoso said the figures which summed to almost $40bn have contributed to the country’s foreign exchange crisis which has dragged the naira to depreciate to over N1,400 at the official market.

The CBN made provisions for school fees and healthcare at a CBN-approved rate.

According to the CBN boss, recent data shows there are significant changes in the demand for PTA for payment of school fees abroad compared to the early 1990s.

Cardoso quoted UNESCO Institute of Statistics data which shows that the number of Nigerian students abroad increased from less than 15,000 in 1998 to over 71,000 in 2015.

Cardoso said by 2018, the figure had reached 96,702 Nigerian students schooling around the world.

The CBN said Nigerian students schooling abroad will exceed 100,000. UK’s Higher Education Statistics Agency projected a 64 per cent increase in Nigerian study in the country, rising from 1,320 in the 2009-2020 academic session to 21,305 by the 2020-2021 session.

Cardoso said, “Given this data, it is crucial to highlight that between 2010 and 2020, foreign educational expenses amounted to a substantial $28.65bn, as for the CBN publicly available balance of payment statistics.

“Similarly, medical treatment abroad has entered around $11bn in costs during the same period. Consequently, over the past decade, foreign exchange demand for education and healthcare has totaled nearly $40bn.

“Notably, this amount surpasses the total foreign exchange reserves of the CBN. Mitigating a significant portion of this demand could have resulted in a considerably stronger naira today.”

Cardoso also revealed plans to introduce a new foreign exchange operation mechanism for the operation of the Bureau de Change segment and fight currency hoarding.

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