The recent statement by the Governor of the Central Bank of Nigeria (CBN), Oluyemi Cardoso, that the foreign exchange (forex) crisis in Nigeria was engendered by foreign school fees and medical tourism amounted to scratching the surface of the problem. According to the CBN boss, Nigerians spent over $40 billion on foreign education and health care between 2010 and 2020.
Cardoso, who spoke while appearing before the House of Representatives for the sectoral debate on the economy, said foreign education expenses gulped $28.65 billion while medical treatment abroad gulped about $11.01 billion. This amount, he said, surpassed the total current exchange reserves of the apex bank. Within the same period, the CBN boss said the Federal Government spent $58.7 billion on personal travel allowances (PTAs) and disbursed an additional $9.01 billion to Nigerians for personal foreign travel between January and September 2019. He believes these are the major factors putting pressure on the naira.
A few weeks ago, the CBN similarly reported that Nigerians spent $1.58 billion on foreign medical and school bills as well as other personal matters in the first six months of 2023. According to the CBN data, Nigerians spent $245.68 million on foreign health-related issues, $896.09 million on foreign education, and $434.63 million on other personal foreign needs.
Cardoso also lamented that the “Nigerian foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira. Factors contributing to this situation include speculative forex demand, inadequate forex supply due to non-remittance of crude oil earnings to the CBN, increased capital outflows and excess liquidity from fiscal activities.”
To some extent, Cardoso is right on foreign school fees and medical tourism being major contributors to our forex crisis. He quoted a recent data from UNESCO’s Institute of Statistics, which indicated that the number of Nigerian students abroad increased from less than 15,000 in 1998 to over 71,000 in 2015. Presently, the number is said to be over 100,000. In the United States alone, the number of Nigerian students reportedly stood at over 17,000 in the 2022/2023 academic session. This is partly because of the appalling state of infrastructure, including teaching and learning facilities, in most of our public universities. Disruptions in the academic programmes due mainly to frequent strikes by the Academic Staff Union of Universities (ASUU), the Non-Academic Staff Union of Educational and Associated Institutions (NASU) and the Senior Staff Association of Nigerian Universities (SSANU) are part of the problems.
With regard to medical tourism, it is obvious that our health sector is also sick. The World Health Organisation (WHO) recommended doctor-patient ratio to be 1:600. But in Nigeria, it stands at about 1:5,000. Members of the National Association of Resident Doctors (NARD) are frequently on strike to press home certain demands from the government. Many health professionals have left Nigeria to seek greener pastures abroad. Those who suffer the consequences mostly are poor people.
The rich, especially government officials, benefit more from medical tourism. Ex-President Muhammadu Buhari frequently travelled to London for medical treatment during his tenure. For the eight years he was in power, Buhari, his wife and son reportedly spent over 250 days abroad for medical treatment with millions of dollars of public funds. At the twilight of his administration in 2023, Buhari’s wife, Aisha, initiated the commissioning of the Presidential Wing of the State House Medical Centre otherwise called VIP Clinic worth N21 billion. Mrs. Buhari said she initiated the project in 2017 when her husband spent three months abroad for medical treatment. She said Tinubu and his family would enjoy the facility. But has it really stopped the current first family from seeking medical attention abroad?
Foreign school fees and medical bills may be part of the forex challenges, but they are a fraction of the problem. If we may ask, what has happened to the Diaspora remittances? The major problem is that the government has not got the right strategy. It has failed to address the fundamental issues that led to the forex crisis. Rather, it has continued to live in denial. It did not design the right policies before the unification of the forex market.
It ought to have diversified the economy by making sure that the production base is taken care of. We must export not just oil but other commodities that will earn us dollars. This can be achieved by attracting foreign investments. Unfortunately, investors are not coming as expected. Rather, some multinationals have left the country.
Government should revamp our health and education sectors and pay the workers very well. It should allocate a minimum of 15 per cent of the annual budget to each of the two important sectors. This may help to stem the exodus of thousands of professionals to foreign countries.
Government should also tackle insecurity and initiate policies that will attract both local and foreign investments. We need to produce more than we consume. It should focus on how to fix the economy and embark on reforms that will address economic challenges.