Saving the Naira - THE NATION
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Central Bank of Nigeria’s (CBN) governor, Yemi Cardoso, has blamed the continued decline in the value of the naira on two critical sectors of the economy: health and education that many Nigerians now find convenient to seek abroad.
Cardoso who spoke on Tuesday when he appeared before the plenary of the House of Representatives reeled out huge amounts spent in pursuit of both sectors abroad. He was invited by the House to shed light on the issue.
According to Cardoso, Nigeria spent $28.65bn on foreign education and $11.01bn on medical tourism, between 2010 and 2020. The cumulative $40 billion exceeded the total current foreign exchange reserves of the apex bank.
The currency recorded an all-time low on January 29, 2024, when it traded at N1,348.63/$ in the official window. Two days later, precisely on January 31, the highest exchange rate of N1,530 was recorded against the dollar at the parallel market.
The figures reeled out by Cardoso are frightening. While there were about 15,000 Nigerian students abroad in 1978, the figure jumped to over 71,000 by 2015 and 96,702 in 2018.
The same applies to medical tourism.
We agree with the apex bank’s governor that “mitigating a significant portion” of the forex demand “could have resulted in a considerably stronger naira”. But only partially agree with him that what is required is attitudinal change on the part of Nigerians.
Nigerians did not cause the craze for foreign education and medical tourism. Yes, the figures spent on both are high, but then, the money is only a symptom of more serious problems.
Forex demands for medical tourism and foreign studies have continued to soar because the governments left the education and health sectors to suffer, like they did the power sector, such that there was no addition to power generation for decades despite increased demand for electricity.
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Many Nigerians would attest to the fact that we had several foreign students in some of our universities even up to the 1980s. That was because the standard was high and relatively compared with that of many universities abroad. Over the years, however, the rot that permeated virtually all sectors of the economy soon afflicted the universities.
Lecturers went on strike at will, sometimes for long periods; funding to the universities progressively fell, etc. Soon, the impact began to be felt in the universities. Standards dropped. Academic calendar became unpredictable such that students could end up spending six or more years for programmes that should normally be concluded in four years.
This was the genesis of the surge in Nigerians travelling abroad in search of the proverbial golden fleece. And, unlike before when they only went to study, these days, they leave without the intention of returning to the country, again because there is nothing for them to do at home. Another problem created by lack of ideas on job creation on the part of successive governments.
The same applies to the health sector where we started losing some of our best doctors and specialists to foreign countries as far back as the mid-’80s. Our hospitals which at a time were well patronised even by prominent foreigners soon lost their allure with successive governments’ lukewarm disposition to the welfare of doctors and medical equipment. It was therefore a matter of time too for the doctors and other medical specialists to find succour outside the country, a thing that we are experiencing even to date.
Because nature abhors a vacuum, Nigerian governments and their officials, rather than fix the problems in our hospitals, began medical tourism, again, with serious consequences for our hard-earned foreign exchange.
To reverse the trend, governments must lead the way. We need good and responsive governments that would gradually take us back to the relatively comfort zone where we are coming from. Even the National Assembly law makers who summoned the CBN governor contributed to the slide in the fortune of the naira by rejecting vehicles made in Nigeria, preferring imported ones instead.
We must intensify efforts at local production of goods and services like we used to do in the automobile, textile, agricultural and other sectors, to reduce the stress on forex. That way, we would be able to impact demand and supply of forex in a way that would be favourable to our currency.