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The Central Bank of Nigeria (CB\n) has blamed the unsavoury foreign exchange rates in Nigeria to influx and demands of the United States Dollars (USD), reports ITREALMS.
Disclosing these on Tuesday at a presentation to the members of the Federal House of Representatives on sectoral debate in Abuja, CBN Governor, Mr. Olayemi Michael Cardoso, attributed the value of the US Dollar in Nigeria as determined by the balance of US Dollars entering the country and the demand for US Dollars among Nigerians based on the theory of demand and supply.
“The exchange rate in Nigeria has increased or depreciated due to the simultaneous occurrence of two factors: a decline in the supply of US Dollars coinciding with a surge in the demand for US Dollars,” he said.
Cardoso cited the number of Nigerian students abroad which demand US Dollars for their living expenses among others.
He also said that between 1980 and 1990 these demands were minimal, but in recent data shows a significant change.
He cited UNESCO’s Institute of Statistics, saying that the number of Nigerian students abroad increased from less than 15,000 in 1998 to over 71,000 in 2015.
By 2018, he pointed out that this figure had reached 96,702 students, as per the World Bank.
In addition, CBN Governor said that the United Kingdom’s Higher Education Statistic Agency, noted a 64 per cent increase in Nigerian students studying in the country, rising from 13,020 in the 2019/2020 academic session to 21,305 by the 2020/2021 session.
He highlighted that between 2010 and 2020, foreign education expenses amounted to a substantial US$28.65 billion, as per the CBN’s publicly available Balance of Payments Statistics.
“Similarly, medical treatment abroad has incurred around US$11.01 billion in costs during the same period. Consequently, over the past decade, foreign exchange demand for education and healthcare has totaled nearly US$40 billion” he said, stressing this amount surpassed the total current foreign exchange reserves of the CBN.
“Mitigating a significant portion of this demand could have resulted in a considerably stronger Naira today,” Cardoso declared.
On the Personal Travel Allowances (PTA), CBN chief said that accounted for a total of US$58.7 billion during the same period and specifically noted that between January and September 2019, the CBN disbursed US$9.01 billion to Nigerians for personal foreign travel.
He pointed out food imports escalated from US$2.63 billion in 1980 to US$14.84 billion in 2019.
Reminding the House of Representative members that in 1980s, over 75 per cent of the vehicles used in Nigeria were domestically produced by companies like Volkswagen in Lagos, Peugeot in Kaduna, and others.
“Presently, over 99 per cent of the cars driven are imported, necessitating dollar payments,” he decried.
Similarly, he said that in 1980, the majority of the clothing worn was sourced from Nigerian textile mills in Funtua, Asaba, Kano, Lagos, and various other towns and cities.
“Today, nearly all the clothing worn is made from imported fabrics,” Cardoso asserted.
Cardoso also noted that another report projected the number of Nigerian students studying abroad to exceed 100,000 by end of 2022.
In addition, CBN Governor said that the United Kingdom’s Higher Education Statistic Agency, noted a 64 per cent increase in Nigerian students studying in the country, rising from 13,020 in the 2019/2020 academic session to 21,305 by the 2020/2021 session.
He highlighted that between 2010 and 2020, foreign education expenses amounted to a substantial US$28.65 billion, as per the CBN’s publicly available Balance of Payments Statistics.
“Similarly, medical treatment abroad has incurred around US$11.01 billion in costs during the same period. Consequently, over the past decade, foreign exchange demand for education and healthcare has totaled nearly US$40 billion” he said, stressing this amount surpassed the total current foreign exchange reserves of the CBN.
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“Mitigating a significant portion of this demand could have resulted in a considerably stronger Naira today,” Cardoso declared.
On the Personal Travel Allowances (PTA), CBN chief said that accounted for a total of US$58.7 billion during the same period and specifically noted that between January and September 2019, the CBN disbursed US$9.01 billion to Nigerians for personal foreign travel.
He pointed out food imports escalated from US$2.63 billion in 1980 to US$14.84 billion in 2019.
Reminding the House of Representative members that in 1980s, over 75 per cent of the vehicles used in Nigeria were domestically produced by companies like Volkswagen in Lagos, Peugeot in Kaduna, and others.
“Presently, over 99 per cent of the cars driven are imported, necessitating dollar payments,” he decried.
Similarly, he said that in 1980, the majority of the clothing worn was sourced from Nigerian textile mills in Funtua, Asaba, Kano, Lagos, and various other towns and cities.
“Today, nearly all the clothing worn is made from imported fabrics,” Cardoso asserted.
Remmy Nweke/DoP
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