Mr President, Don’t Ban FX For Overseas School Fees. | Independent Newspapers Limited
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Mr President, Don’t Ban FX For Overseas School Fees.

Posted: Mar 15, 2016 at 12:43 am   /   by   /   comments (1)

Magnus Onyibe, Lagos

With the sort of gloom and doom now pervading the socio-political atmosphere in Nigeria, due to the ongoing financial crisis, humour seems to be the best antidote for easing the stress.

However, while President Muhammadu Buhari is trying to rein in corruption, the price of crude oil, the commodity that Nigeria depends on for roughly 95% of her foreign exchange (FX) earning, has been tumbling dramatically and, in the process, it has shed nearly 70%, due mainly to global supply glut, triggering what can best be described as panic attack in government circles.
Consequently, a plethora of policies are now in place, including barring of 41 items for access to FX from CBN.
The measures are aimed at stemming further haemorrhaging of the economy, which has become financially anaemic as it suffers the double jeopardy of massive corruption by unscrupulous politicians and civil servants, as well as drastic reduction of FX income owing to international oil price slump.


While Western establishment media organs like the London based Economist magazine and New York Time magazine have bashed Nigerian government for introducing capital control measures to save the naira, financial institutions such as JP Morgan, have delisted Nigeria from her emerging markets shares index, thereby causing huge exit of portfolio investments from Nigeria by international equity and portfolio managers.

The international monetary fund (lMF) has also weighed in with advise that Nigeria should devalue her currency; but Nigerian authorities have justifiably resisted the proposition and rather than heed the Brenton wood institution’s advise, Nigeria has taken the option to defend the naira by maintaining fixed exchange rate as opposed to floating rate, which is the preference of Western financial institutions.

Hypocritically, Nigeria is now being punished and sabotaged for adopting policies employed by leaders of the capitalist world, the UK and USA when they faced similar economic quagmire.
Frustratingly, despite the drastic measures introduced to stabilize the naira, it now exchanges with the USA dollar in the parallel market for between N300-N400.
Indeed, combinations of factors are responsible for the continuous pressure on the naira, and chief of which is that about 40% of Nigeria’s FX outflow is for the importation of petroleum products.

The two next biggest single tickets outflows that are gulping FX after fuel import are payments of school fees abroad and medical bills which are also estimated to be about $2b apiece. The third single item is the cost of importation of rice which is estimated at $1.8b annually.

Understandably, owing to the rapid depletion of the nation’s FX reserve, (now reduced to about $27b) the seemingly prohibitive cost of educating Nigerians abroad, and the huge sum expended on Medicare overseas are giving Mr President headache.
Be that as it may, does the situation warrant the decision to plunge Nigerians into the abyss of ignorance and shortening the life span of critically ill Nigerians when students are denied FX for payment of school fees abroad and sick people barred from accessing funds for overseas treatment from the CBN?
Before proceeding further, let me quickly invite Mr President’s attention to some pretty disturbing data on where Nigeria currently stands in the new world order with respect to literacy and health care, as captured in CIA World Facts Book.

On literacy/ educational standard, Nigerians from age 15 and above can read and write. The total population of literate people is 59.6% with an average of 69.2% male and 49.7% female.

When it comes to comparing Nigeria to world standards in literacy and human resource, the fact book awarded Nigeria 213 points, which is fairly ok.
And guess what? The pretty outlook on education is a result of the itinerant nature of the average Nigeria whose thirst for knowledge is so insatiable that you can find Nigerians in all nooks and crannies of the world studying-oftentimes even as remote as the war zone, Ukraine.

What is more, it is some of these same people, who attend schools abroad that constitute the Diaspora population, which the World Bank said, remitted a whooping $21 billion back home in 2015.

What the data above implies is that, although those who study abroad consume FX initially, they eventually end up generating FX for Nigeria in the long run when, as Diaspora dwellers ,they remit funds back home, making allocation of FX for schooling abroad, a veritable investment with good return on investment (ROI).

Under the scenarios above, if l were the minister of education or minister of health, these are the hard facts that l would take to President Buhari to make the case for him to rethink his policy of sanctioning allocation of CBN funds to settle bills for education overseas and payment of medical bills of the infirm in our society, in foreign hospitals.