Banks’ Planned Forex Cut for Fees Payment May Make Overseas Education Unattractive

The latest attempt by the Bankers’ Committee to reduce the amount of foreign exchange provided for payment of school fees overseas…

The latest attempt by the Bankers’ Committee to reduce the amount of foreign exchange provided for payment of school fees overseas, may make schooling abroad tedious and unappealing, THISDAY has learnt.

Significant demand for foreign exchange for payment of school fees, BTA and PTA among others appeared to exert undue pressure on the local currency and have continued to deplete the country’s foreign reserves. The falling price of oil means that the country would be earning fewer dollars but needs to continually back every naira used for overseas transactions with the reserves.

Essentially, the more foreign exchange needed to pay for school fees abroad, the more the foreign reserves, which is critical for securing foreign investors’ confidence in the economy is further depleted.

Worse still, there are concerns that the amount of foreign exchange being provided for overseas schooling could actually be crowding out banks capacity to provide forex to the real sector whose activities are critical to economic stimulation.

Following CBN’s restriction of 41 items from accessing forex from its official window, the real sector operators have found it difficult to import the raw material and machinery required to run their businesses.

Experts believe the huge amount of forex provided for overseas education could be re-channeled to the real sector to resuscitate the segment and provide the much needed jobs.

But discouraging overseas schooling amid the falling standard of education in the country appeared to be a major worry to analysts, THISDAY findings revealed. Group Managing Director/Chief Executive, Access Bank Plc, Mr. Herbert Wigwe had said the huge demand for forex for overseas school obligations had become a major concern to the Bankers’ Committee, which is now considering a review of the trend. According to him, though no final conclusion had been reached on what step to take in order to cut forex supply for school fees, “but one thing was clear, which was the fact that we should not allow this demand to crowd out real sector investment because the money you get to pay these school fees is from industry that is working locally.

He also called on government to provide the necessary infrastructure and skills to make the education and health sectors attractive to Nigerians in order

to save the country’s falling reserves.

He said: “Why can’t we revisit our educational system and make sure our children go to school locally? Why must we spend a lot of money around children school fees overseas or medical tourism as they call it.” Nevertheless, it was further learnt that though there may not be an outright prohibition of overseas schooling but it could be subsequently added to the list of items banned from accessing forex from the CBN’s official window.

That could make drastically shoot up the cost of schooling as Nigerians would have to source forex from the black market which is twice the official rate-and may not even get the required amount they need. Wigwe said: “Now the idea is not that you can’t do it, it is that you can’t access it from the central bank’s limited resources, that’s the simple point. So we didn’t reach any formal conclusion but it’s part of the general direction which we are headed.”