Foreign Education, Medical Tourism Worsen FX Crisis, Costing Nearly $40bn – Cardoso Laments

Yemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), said foreign education and medical tourism on have contributed significantly in Nigeria’s foreign exchange (FX) crisis.

Cardoso made the revelation when he appeared before the House of Representatives on Tuesday, to give insights on the continued depreciation of the naira in the foreign exchange market.

Addressing lawmakers, Cardoso emphasized the financial toll that medical tourism and Foreign education has taken on the nation.

“Between 2010 and 2020, foreign educational expenses amounted to a substantial $28.65 billion, as per the CBN publicly available balance of payment statistics. Similarly, medical treatment abroad has incurred around $11 billion in costs during the same period. Consequently, over the past decade, foreign exchange demand for education and healthcare has totaled nearly $40 billion,” Cardoso stated.

Highlighting the ramifications of this immense expenditure, the CBN governor noted that the “amount surpasses the total foreign exchange reserves of the CBN.

“Mitigating a significant portion of this demand could have resulted in a considerably stronger naira today.”

The Governor outlined the CBN’s efforts to manage these expenditures, including setting approved rates for school fees and healthcare payments. He also noted a notable shift in the pattern of demand for Personal Travel Allowance (PTA) for overseas education fees, indicating evolving trends since the early 1990s.

Furthermore, Cardoso projected a significant increase in the number of Nigerian students studying abroad, surpassing 100,000. This surge underscores the growing international educational aspirations of Nigerian students and the consequent strain on the country’s foreign exchange reserves.

In response to these challenges, Cardoso unveiled plans to introduce a new foreign exchange operation mechanism for the Bureau de Change segment and to combat currency hoarding.

As Nigeria grapples with its FX crisis, exacerbated by the substantial outflow of funds for foreign education and medical treatment, Cardoso’s revelations serve as a sobering reminder of the urgent need for comprehensive measures to stabilize the economy and safeguard the nation’s financial future.