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Nigerians spent $38.17 million on foreign education between January and March 2024, according to data from the Central Bank of Nigeria’s (CBN) first-quarter 2024 statistical bulletin. This represents an 83% decrease from the $218.87 million recorded in the same period last year.
However, on a quarter-by-quarter basis, there was a 54% increase from the $24.82 million spent in Q4 2023.
The year-on-year decline in foreign exchange spending for education abroad comes amid a significant drop in international student enrollment at UK universities earlier this year. A survey conducted by Universities UK across 73 universities revealed a substantial decrease in international postgraduate enrollment, with a 44% decline in January compared to the previous year. This reduction has exceeded expectations, presenting a financial challenge for universities that rely on the higher fees paid by international postgraduate students.
Data from Enroly, used by around 60 universities, also indicates a waning interest among international students in studying in the UK, evidenced by a notable drop in deposit payments compared to the previous year.
In February, CBN Governor Yemi Cardoso stated that spending on foreign education and medical tourism is a significant factor contributing to Nigeria’s foreign exchange challenges. In a detailed presentation to the House of Representatives, Cardoso highlighted that an alarming $40 billion has been spent on foreign education and healthcare, contributing to the devaluation of the Naira.
Cardoso emphasized the mounting pressure on the foreign exchange market amid forex scarcity, which further depletes the value of the Naira.
While foreign exchange spending for education services decreased year-on-year, there was a significant increase in spending on health-related and social services. CBN data showed 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, it was 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 of $10,000 per customer annually for foreign currency purchases for school fees. 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. Transactions must be accompanied by a set of documents, including 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.
Additionally, the CBN is implementing a limit of $5,000 per annum for foreign currency transactions related to 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 such as 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.
These proposed guidelines were approved in May 2024 by the apex bank, potentially further limiting the amount of forex spending on foreign education and medical tourism.
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