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The Central Bank of Nigeria (CBN) has identified two major factors that contribute to the demand for dollars in the country, as the value of the Naira continues to decline.
According to CBN data, Nigerians primarily spend money on overseas medical and education services, which has led to an increase in the allocation for these two sectors.
In 2022, the amount allocated for overseas medical and educational costs rose to $1.81 billion, compared to $1.76 billion in 2021. The demand for international education among Nigerians has been on the rise, despite the economic crisis and a failing educational system.
Additionally, many Nigerians seek healthcare abroad due to the poor health infrastructure in the country. Over the past decade, Nigerians have spent over $40 billion on healthcare and education abroad.
The decline in the supply of dollars can be attributed to various factors, including decreased foreign investments, a shortfall of crude oil, and a dip in remittances from the diaspora.
However, the CBN Governor, Olayemi Cardoso, highlighted that medical tourism and the increasing number of Nigerians studying abroad are the primary drivers of the nation’s demand for foreign currency. In recent years, the number of Nigerian students studying in the United States has increased significantly.
According to a report by the Institute of International Education, there were 17,640 Nigerian students enrolled in US colleges and institutions in the 2022-2023 academic year, representing a 22.2% increase from the previous year. Nigeria is the only African nation among the top 10 countries with the highest proportion of students studying in the United States.
While the demand for dollars remains high, the value of the Naira continues to decline. On Wednesday, the Naira dropped to N1308.52 per dollar, compared to N1,300.15 on Tuesday.
