In a revelation that underscores the economic challenges facing Nigeria, Governor of the Central Bank of Nigeria (CBN), Dr Yemi Cardoso, has attributed the nation’s depreciating currency to the burgeoning foreign exchange expenditure on Nigerian students studying abroad and medical tourism.
Cardoso highlighted the staggering foreign exchange demand, revealing that expenditures on education and healthcare alone amounted to almost $40 billion over the past decade.
The CBN governor addressed the House of Representatives, on Tuesday, attributed the deepening foreign exchange crisis to the country’s heavy reliance on imports for 99 percent of cars and textiles, coupled with a decline in the supply of US dollars and a surge in demand, driving up the exchange rate.
Despite these challenges, Cardoso provided a glimmer of optimism, citing positive developments in the economy.
Notably, he disclosed a robust volume of transactions at the stock exchange, totaling $844 million on Monday, February 5, 2023.
Furthermore, he mentioned the Nigerian National Petroleum Corporation’s compliance with the President’s directive to transfer crude oil sale proceeds to the CBN, signaling proactive measures to stabilize the economy.
Adding to the positive outlook, Finance Minister Mr Olawale Edun asserted that Nigeria’s economic condition has improved since May 29, 2023.
Edun pointed out a reduction in petrol consumption by about 20 million litres, efforts to combat pipeline vandalism, and a surge in daily oil production to 1.65 million barrels.
He assured the public of forthcoming palliatives to address the rising cost of living and emphasized the government’s focus on domestic resource mobilization, bringing down budget deficit.
In his submission, Minister of Budget Senator Atiku Bagudu highlighted positive shifts in budgetary allocations.
He emphasized a capital expenditure of 39% of the budget, with increased budgets for critical sectors like infrastructure, health, and education.
Additionally, there are provisions to support agriculture, with increased funding for small-scale farmers to enhance national productivity.
Cardoso’s revelation about the substantial increase in the number of Nigerian students studying abroad, projected to exceed 100,000 by 2022, sheds light on the escalating foreign education expenses, amounting to $28.65 billion between 2010 and 2020.
The rising costs of medical treatment abroad added an additional $11.01 billion during the same period, contributing to the staggering $40 billion foreign exchange demand.
Cardoso emphasized that mitigating a significant portion of this demand could have resulted in a considerably stronger naira today, given that the total foreign exchange demand surpasses the current reserves of the CBN.
The CBN governor concluded by underscoring the impact of import dependency, citing that over 99 percent of cars and textiles in Nigeria are imported, intensifying the demand for dollars.
He urged comprehensive reforms to bolster the supply side of the exchange rate, emphasizing the need to ‘earn’ dollars through exports or foreign investments, essential for stabilizing the currency.
Deputy Speaker Benjamin Kalu emphasized the need for visionary leadership and resilient frameworks.
He urged reforms that address immediate needs while laying a dynamic framework for future challenges.
The eyes of the nation are on the Parliament, expecting outcomes that reinforce economic pillars, safeguard fiscal integrity, and ensure a prosperous future for all Nigerians.
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