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Home Currencies

Forex Spending on Foreign Education and Healthcare Surges Despite Naira Depreciation

Victoria Attah by Victoria Attah
January 27, 2025
in Currencies
Reading Time: 3 mins read
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Nigerians have increased their expenditure on foreign education and healthcare services despite the significant depreciation of the naira, with spending rising by 26% to $2.3 billion in the first nine months of 2024. This trend has raised concerns among stakeholders, who see it as an indication of the challenges within the country’s education and healthcare sectors.

Rising Demand Amid Currency Depreciation

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Data from the Central Bank of Nigeria (CBN) reveals that spending on foreign education reached $1.8 billion in the first nine months of 2024, marking a 26.5% increase from $1.44 billion in the same period of 2023. Similarly, expenditure on foreign healthcare services rose by 24.8% to $465.67 million, up from $366.05 million in the previous year.

This upward trajectory continues a pattern observed since 2023, reversing a three-year decline from 2020 to 2022. The increase comes despite expectations that the significant depreciation of the naira would lead to a decline in forex demand.

Panic Buying and Advance Planning

Financial experts attribute the rising demand for foreign currency to panic buying and preemptive actions by individuals and businesses. According to Nnamdi Nwizu, Co-Managing Partner at Comercio Partners, the steep fall in the naira’s value prompted individuals to secure foreign currency in anticipation of further depreciation.

“In times of currency instability, people tend to stock up on forex to mitigate future uncertainties. Now that some stability has returned, we may see a gradual decline in demand,” Nwizu explained.

Concerns Over Education Sector Failures

The increase in spending on foreign education has sparked reactions from stakeholders in Nigeria’s education sector. Representatives from the Academic Staff Union of Universities (ASUU) and the Congress of University Academics (CONUA) view this trend as a reflection of declining confidence in the country’s higher education system.

ASUU President, Prof. Emmanuel Osodeke, expressed disappointment, stating, “It is disheartening to see more Nigerians opting for foreign institutions while local universities struggle due to underfunding. We are investing in foreign education at the expense of our own institutions.”

Similarly, Dr. Niyi Sunmonu, President of CONUA, called for immediate action, emphasizing that revitalizing the domestic education sector could reduce capital flight. “If even half of the money spent abroad were invested locally, the state of our universities would improve significantly,” he added.

Investigating Sources of Funding

The National Parent Teacher Association of Nigeria (NAPTAN) has urged authorities to investigate the sources of funds used for overseas tuition payments. NAPTAN’s National President, Haruna Danjuma, questioned whether such large sums were being sourced legally and called for policies that encourage local investment in education.

Healthcare System in Need of Reforms

The rising expenditure on foreign medical services highlights deep-seated challenges within Nigeria’s healthcare system. Medical professionals argue that limited access to specialized treatment and outdated infrastructure are driving Nigerians to seek treatment abroad.

Dr. Akinola Akinmade, Deputy Medical Director at Afe Babalola University Multi-System Hospital, pointed out that many Nigerians travel abroad for procedures such as cardiac surgery and kidney transplants, even though some of these services are available locally.

“The lack of trust in domestic healthcare, alongside inadequate infrastructure, fuels medical tourism,” Dr. Akinmade stated.

Experts Advocate for Systemic Reforms

Healthcare experts have recommended strategic reforms to improve the quality and accessibility of medical services in Nigeria. Prof. Oladapo Ashiru, President of the Academy of Medical Sciences, emphasized the need for a comprehensive approach that includes investments in medical technology, training of local professionals, and public-private partnerships.

Additionally, Dr. Paul Faduola, Founder of Androcare Fertility Centre, suggested that the Nigerian government consider privatizing teaching hospitals to attract investment and retain medical talent.

“India’s healthcare model provides a useful blueprint. If Nigeria can implement similar strategies, more patients will choose local treatment over foreign options,” Dr. Faduola suggested.

The Way Forward

As stakeholders continue to debate solutions, it is evident that urgent investments in Nigeria’s education and healthcare sectors are required. Improving infrastructure, increasing funding, and fostering public trust are crucial steps toward reversing the trend of rising forex spending on foreign services.

Ultimately, addressing these challenges will not only reduce the strain on foreign reserves but also ensure that Nigerians have access to quality education and healthcare services at home.

Tags: #NigeriaCBN
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