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In the first quarter of 2024, Nigerians spent $38.17 million on foreign education, according to the Central Bank of Nigeria’s (CBN) latest quarterly report. This represents a dramatic 83% drop from the $218.87 million spent in the same period last year. However, there was a significant 54% increase compared to the $24.82 million spent in the previous quarter.
The significant year-on-year decrease in foreign exchange (FX) spending on foreign education comes amidst a decline in international student enrolment at UK universities earlier this year. A survey conducted by Universities UK (UUK) across 73 universities revealed a notable drop in international student enrolment, particularly in postgraduate programs. This January saw a 44% decrease in international students compared to the previous year, a reduction greater than anticipated. This decline poses a financial challenge for universities, which rely on the higher fees paid by international postgraduate students.
Additionally, data from Enroly, a service used by around 60 universities, indicated a decline in interest among international students in studying in the UK, as evidenced by a significant drop in deposit payments compared to the previous year.
Earlier in February, the Governor of the Central Bank of Nigeria, Yemi Cardoso, stated that the amount spent on foreign education and medical tourism significantly contributes to Nigeria’s foreign exchange challenges. In a detailed presentation to the House of Representatives, Cardoso highlighted that an alarming $40 billion has been expended on foreign education and healthcare, exacerbating the devaluation of the Naira. He emphasized the immense pressure in the foreign exchange market amid forex scarcity, which further depletes the value of the Naira.
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While there was a year-on-year decrease in FX spending on education services, there was a significant increase in spending on health-related and social services. According to CBN data, there was a 122% increase from $1.04 million in Q1 2023 to $2.31 million in the same period this year, and a 485% increase from $0.39 million recorded in the last quarter of 2023.
In February, Nairametrics reported that the CBN planned to introduce stringent measures on the purchase of foreign currencies through Bureau De Change (BDC) operators, specifically targeting 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 transactions to be conducted through the BDC’s domiciliary account with a Nigerian bank, ensuring direct payment to the educational institution.
The guidelines stipulate that such transactions must be accompanied by 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 annum for foreign currency transactions concerning medical bills abroad. Similar to 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.
