Weak naira threatens Nigerians’ ability to afford international degree

Nigeria’s foreign-currency shortage is not only squeezing the life out of Africa’s largest economy, it is also threatening the ability of many Nigerians to afford an international degree.

On the back of naira depreciation, new and continuing Nigerian students who will be resuming schools abroad for the 2021/2022 academic session could be paying as much as an additional N2 million or more to complete their tuition fee. Similarly, Nigerians planning to study abroad would also be facing a higher living cost.

Universities abroad have not increased their tuition fees but have rather come up with different waivers to combat the impact of COVID-19, but a weaker naira means higher cost of foreign exchange.

As dollar shortage in Nigeria persists amid falling oil prices due to the global demand drop in the wake of the coronavirus pandemic, the central bank weakened the naira on the official window to N390 against the dollar.

With three devaluations under its belt, the apex bank has adjusted the naira by over 27 percent in 2020 and this means Nigerians who choose to go abroad for an international degree will be paying higher tuition and living cost in 2021 compared to what they would have paid in 2020 or at the beginning of 2019.

“I deferred my 2019 admission from 2020 to 2021 because my parents said the exchange rate was not favourable for them. They were hoping that by the end of 2020 the naira would have appreciated against the pounds, but now it’s even worse than the amount we had calculated in 2019,” Courage Imafidon, an Edo-based MBA applicant, told BusinessDay.

Imafidon fears his parents might not continue with the plans to send him to the UK as they also have to pay the tuition fees of three of his siblings who are registered in Nigerian private universities.

Average tuition fee for international students in the UK is about £13,000 per annum. With the current exchange rate, Nigerian students in UK universities who paid an average of N6 million annual tuition fees in 2019 academic year (using a black market rate of N463) would be paying over N8 million (at the black market rate of N620/£) in 2020, according to BusinessDay analysis. Most Nigerians access the foreign currency at the black market rate.

The situation is the same for Nigerian students who are studying in the US as the naira exchange rate to the dollar has weakened by more than N171 in 2020.

“The exchange rate is likely to restrict a lot of Nigerians who were making plans to travel abroad for school next year. This will also mean that other opportunities to acquire international degrees like scholarship will become very competitive due to the expected number of people that will be considering that option,” a Lagos-based education consultant said.

Even though education is on the list of items that can access the CBN’s official rate, market analysts believe the apex bank official rate which is mostly used for government transactions and the budget is not usually accessible by the ordinary citizens except, of course, they have connections.

Both the parallel market and official rates of the central bank do not favour Nigerians who have plans to travel abroad for education purposes as the weak currency means they would be paying more for both studies and living expenses.

Using the CBN’s official exchange rate of N390/$, a Nigeria planning to study abroad in 2021 would have to make provision for a 27-percent naira depreciation. Using the black market rate, that would run into 32 percent.

President Muhammadu Buhari had told Al Jazeera in March of 2016 that Nigeria could not afford foreign exchange for Nigerians who decide to send their children to foreign universities.

“Those who can afford foreign education for their children can afford it but Nigeria cannot allocate foreign exchange for those who decide to train their children outside the country,” he had said.

Though many Nigerian students may have a hard time paying their way through schools abroad, enrolling in Nigerian universities, especially public ones, is not an option for many as the country’s education standard has been constantly called to question.

Anthony Kila, professor of Strategy and Development and international director of studies at the European Centre of Advanced and Professional Studies, said the government is to blame because it has not done its best to make Nigeria’s education system attractive.

“Nigerians tend to travel abroad for studies because the education system is bad in the country and those that go abroad are the ones that can afford it,” Kila said.

The United Nations Education, Scientific, and Cultural Organisation (UNESCO) recommends that 15 to 20 percent of a nation’s total budget should go to the education sector. Nigeria’s 2020 budget only allocated 6.48 percent to its education sector. It was 7.11 percent in 2019, 7.14 percent in 2018, 7.27 percent in 2017, and 9.20 percent in 2016.