The total amount of money spent on education and medical services abroad between 2010 to 2020 is more than Nigeria’s current foreign reserves of $39.51 billion, according to the latest report from the Central Bank of Nigeria (CBN).
The search for greener pastures is not a term new to Nigerians and for many reasons, Nigerians travel from country to country seeking better lives for themselves. However, according to a report by the Central Bank of Nigeria, this search for better lives is facilitating the fall of Nigeria’s local currency in the exchange market.
According to the apex bank’s Balance of Payment report, Nigerians spent a total of $39.66bn on foreign education and healthcare-related services between 2010 and 2020.
The report further broke down the figures to reveal that Nigerian parents/guardians spent $28.65bn on foreign education while Nigerians spent $11.01bn on healthcare services in foreign countries. This is more than Nigeria’s foreign reserves of $39.51 billion.
Investors King observed the implication of this figure in the CBN report titled “A Simple and Factual Explanation of Nigeria’s Exchange Rate Dynamics.”
The value of the US Dollar in Nigeria is determined by the force of demand and supply, and with the number of Nigerians studying abroad, the demand for the U.S Dollar has increased exponentially while supply remained low due to a series of structural issues like weak foreign revenue generation, tough business environment, and poor economic policy.
The report noted that the number of foreign exchange requests received by Nigerian Banks is mostly for Primary and Secondary education from neighbouring countries while revealing that between 1998 and 2018, the number of Nigerians studying abroad increased from 15,000 to 96,702.
Also, the CBN report also disclosed that the demand for the dollar had exceeded its supply by about $18.45bn while also revealing that oil export – which accounts for over 90 percent of Nigeria’s foreign exchange earnings – had fallen from $93.89bn in 2011 to $31.4bn in 2020.
The Naira, has, however, maintained a bit of stability over the past month owing to a number of policies that the CBN has introduced. Although this doesn’t take away the fact that the currency is struggling in the exchange market and one way to curb this or reduce this is for Nigerians to establish commodities in products and services that the rest of the world will be willing to buy, which will, in turn, churn in the supply of dollars into the Nigerian economy.
