Governor of the
Central Bank of Nigeria (CBN), Olayemi Cardoso, has revealed that between 2010
and 2020, Nigerians spent about $40 billion on foreign education While foreign
education expenses amounted to $28.65 billion, the CBN governor said medical
treatment abroad incurred around $11.01 billion.
Cardoso
who revealed this at the sectorial debate organised by the House of
Representatives, Tuesday, said the amount surpasses the total current foreign
exchange reserves of the apex bank.
The
sectorial debate/dialogue is an initiative of the 10th House of Representatives
as part of its periodic Policy Brief Series. In attendance also were Minister
of Finance, Wale Edun, Minister of Budget and Planning, Atiku Bagudu and the
Chairman of the Federal Inland Revenue (FIRS), Zacch Adedeji.
Cardoso
while providing reasons for the nation’s volatile exchange rate, explained that
the exchange rate in Nigeria has increased and depreciated due a decline in the
supply of US Dollars coinciding with a surge in the demand for US Dollars.
Quoting
recent data from UNESCO’s Institute of Statistics, Cardoso said number of
Nigerian students abroad increased from less than 15,000 in 1998 to over 71,000
in 2015. According to him, by 2018, the figure had reached 96,702 students.
“Given
this data, it’s crucial to highlight that between 2010 and 2020, foreign
education expenses amounted to a substantial US$28.65 billion, as per the CBN’s
publicly available Balance of Payments Statistics”, he stated.
Cardoso added:
“Similarly, medical treatment abroad has incurred around US$11.01 billion in
costs during the same period. Consequently, over the past decade, foreign
exchange demand for education and healthcare has totalled nearly US$40 billion.
Notably, this amount surpasses the total current foreign exchange reserves of
the CBN. Mitigating a significant portion of this demand could have resulted in
a considerably stronger Naira today.
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“Personal Travel
Allowances have accounted for a total of US$58.7 billion during the same
period. Notably, between January and September 2019, the CBN disbursed US$9.01
billion to Nigerians for personal foreign travel.
“Continuing
on the topic of the demand for US Dollars, Nigeria’s annual imports, which
require dollars for payment, amounted to US$16.65 billion in 1980. By 2014, the
annual import expenditure had significantly surged to US$67.05 billion,
although it gradually decreased to US$54.71 billion as of last year. Similarly,
food imports escalated from US$2.63 billion in 1980 to US$14.84 billion in
2019.
According to Cardoso,
given the substantial demand for education, healthcare, professional services,
personal travel, and similar needs, the exchange rate is bound to face ongoing
pressure.
The CBN
governor who said the country is at a turning point, observed that the bold
reforms underway across different segments of the economy, though initially
challenging, are aimed at addressing these challenges sustainably.
He
expressed confidence that positive outcomes are already emerging and will
become more apparent in the near future.
He
added while inflation pressures may persist, albeit temporarily, they are
expected to moderate significantly by Q4 2024, noting that exchange rate
pressures are also expected to reduce with the smooth functioning of the
foreign exchange market.
He said
to bolster the inflow of US Dollars into the country, the economy must earn
these dollars through exports, whether oil or non-oil, or by attracting foreign
investments.
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