Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), has said that the amount spent on foreign education and medical tourism contributes to Nigeria’s foreign exchange challenges.
In a presentation to the House of Representatives on Tuesday, Cardoso highlighted that an alarming $40 billion has been expended on foreign education and healthcare, a factor contributing to the devaluation of the Naira, which has plummeted to over N1,400 in the official market.
Cardoso said:
“Given this data, it is crucial to highlight that between 2010 and 2020, foreign educational expenses amounted to a substantial $28.65 billion, as for the CBN publicly available balance of payment statistics.
“Similarly, medical treatment abroad has entered around $11bn in costs during the same period. Consequently, over the past decade, foreign exchange demand for education and healthcare has totaled nearly $40 billion.
“Notably, this 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.”
Inflation
On the rising inflation, Cardoso, assured Nigerians that the nation’s inflation rate will drop.
Meanwhile, Nigeria’s inflation has been on the rise for 11 consecutive months, reaching its peak in December 2023, according to the National Bureau of Statistics (NBS).
The annual inflation rate rose to 28.92 per cent in December from 28.20 per cent in November.
The headline inflation rate showed an increase of 0.72 per cent points when compared to the November 2023 headline inflation rate.
But, the CBN governor specifically told the lawmakers that inflation will reduce to 21%.
Giving an outlook for 2024, he said: “Inflationary pressures are expected to decline in 2024 due to the CBN’s inflationary targeting policy aiming to rein in inflation to 21.4 per cent, aided by improved agricultural productivity and easy global supply chain pressures.
“The Nigerian foreign exchange market is currently facing increased demand pressures causing a continuous decrease in the value of naira.”
Cardoso is one of the top government officials who was summoned by the lower chamber over the state of the economy as well as the free fall of the naira recently.
Others quizzed were the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; Minister of Budget and National Planning, Abubakar Bagudu and the Executive Chairman of the Federal Inland Revenue Service (FIRS) Zacch Adedeji.
Cardoso explained that the apex bank has unveiled measures to address the persistent decline in the value of the naira.
According to him, the economy must earn through export to boost the naira He said the CBN plans to instill Confidence through stability in consumer prices and the foreign exchange market.
He believes that the policy measures of the bank are expected to impact positively on inflation.
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