Nigerians between January and March 2024 spent $38.17 million on overseas schooling. Data from the Central Bank of Nigeria’s (CBN) quarterly statistical bulletin for the first quarter of 2024 supports this. Compared to the $218.87 million spent during the same period last year, the amount spent has dropped by 83%.
On a quarterly basis, however, the amount spent increased by 54% from $24.82 million in Q4 2023. The decline in foreign exchange spending on education occurred amidst the decline in enrolment of overseas students at UK universities earlier this year, year over year.
A survey conducted by Universities UK (UUK) across 73 universities revealed a significant drop in international student enrolment, particularly in postgraduate programs. This January saw a 44% decrease in such students compared to the previous year, a reduction greater than anticipated.
This sharp fall in international students, who typically pay higher fees for postgraduate courses, poses a financial challenge for universities.
Also, data from Enroly, used by around 60 universities, indicates a decline in interest among international students in studying in the UK, evidenced by a significant drop in deposit payments compared to the previous year.
What you should know
The Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, stated earlier in February of this year that one of Nigeria’s foreign exchange problems is the amount spent on medical and educational travel abroad.
Cardoso gave a thorough presentation to the House of Representatives in which he pointed out that the devaluation of the naira is partly due to the frightening $40 billion that has been spent on healthcare and education abroad.
The governor of the CBN bemoaned the pressure on the foreign currency market in the face of FX scarcity, which exacerbates the depreciation of the naira.
Foreign exchange (FX) investment in education services decreased year over year, whereas spending on social and health services increased significantly.
The CBN data shows that there was an increase of 122% from $1.04 million in Q1 2023 to $2.31 million in the same period this year. There was also an increase of 485% from $0.39 million recorded in the last quarter of 2023.
Also, in February this year, Nairametrics reported that the CBN planned to introduce stringent measures on the purchase of foreign currencies through Bureau de Change (BDC) operators, with a specific focus on transactions related to overseas education and medical expenses.
As part of the apex bank’s revised regulatory guidelines for BDCs in Nigeria, there will be a cap on foreign currency purchases for school fees at $10,000 per customer annually. This process requires the transaction to be conducted through the BDC’s domiciliary account with a Nigerian bank, ensuring direct payment to the educational institution.
It also stipulates that such transactions must be accompanied by a set of documents: a duly filled out e-Form A, proof of admission or course registration, the educational institution’s bill or invoice, and, for postgraduate studies, a copy of the undergraduate degree certificate or an officially verified statement of results.
In addition to educational fee regulations, the CBN is implementing a limit of $5,000 per year for foreign currency transactions concerning medical bills abroad.
Similar to the educational fee transactions, funds for medical bills will be transferred directly from the BDC’s domiciliary account to the medical facility, supported by comprehensive documentation.
This includes a completed e-Form A, a referral letter from a recognized specialist doctor or hospital in Nigeria, valid travel documents, and a letter from an overseas medical professional detailing the cost of treatment.
The proposed guidelines were eventually approved in May 2024 by the apex bank, which may further limit the amount of FX spending on foreign education and medical tourism.
