The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has unveiled the staggering impact of foreign education and medical tourism on Nigeria’s foreign exchange challenges, shedding light on the country’s spending habits and their detrimental effects on the economy.
Addressing the House of Representatives on Tuesday, Cardoso presented a detailed analysis, revealing that an eye-watering $40 billion has been drained from Nigeria’s coffers due to expenditures on foreign education and healthcare. This revelation comes against the backdrop of the Naira’s sharp devaluation, with its official market value plummeting to over N1,400.
In his address, Cardoso emphasized the urgency of addressing this issue, stating, “Between 2010 and 2020, foreign educational expenses amounted to a substantial $28.65 billion, as per the CBN’s publicly available balance of payment statistics. Similarly, medical treatment abroad has incurred around $11 billion in costs during the same period.”
He continued, “Consequently, over the past decade, foreign exchange demand for education and healthcare has totaled nearly $40 billion. 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 further elaborated on the measures taken by the CBN to manage these expenditures, including setting approved rates for school fees and healthcare payments. He highlighted a significant shift in the pattern of demand for Personal Travel Allowance (PTA) for overseas education fees, indicating evolving trends since the early 1990s.
The Governor also projected a concerning trend, indicating that the number of Nigerian students studying abroad is expected to surpass 100,000. This underscores the burgeoning aspirations of Nigerian students for international education and the profound financial implications for the country’s foreign exchange reserves.
In response to these challenges, Cardoso revealed plans to introduce a new foreign exchange operation mechanism for the Bureau de Change segment, aiming to tackle currency hoarding and ensure more efficient management of foreign exchange resources.
As Nigeria grapples with the repercussions of excessive spending on foreign education and medical tourism, Cardoso’s revelations serve as a wake-up call for policymakers to address these issues and safeguard the nation’s economic stability.