Forex crisis puts parents of students studying abroad under severe pressure
These are indeed challenging times for parents residing in Nigeria but who have kids in foreign schools as they struggle to raise foreign exchange to fund their children’s education due to scarce foreign currencies amidst rising rates.
Some of the parents, who spoke to Sunday PUNCH on the development, expressed frustration at the falling value of the naira, which they had to use to purchase foreign currencies to pay the tuition of their children as well as other associated costs and living costs.
The naira traded at 915 against the United States dollar at the parallel market on Saturday, while the pound sterling was sold for N1,180.
At the Investors and Exporters’ forex window, the naira commenced trading at 773.29/$ on Friday and hit a high of 799.9/$ before closing at 778.42/$. The currency lost by 0.87 per cent compared to the N771.69 it exchanged for the dollar on Thursday.
The open indicative rate closed at N773.29 to the dollar on Friday. A spot exchange rate of N799.90 to the dollar was the highest rate recorded in the day’s trading before it settled at N778.42.
A total of 73.80 million dollars was traded at the Investors and Exporters’ window on Friday.
A businessman, Mr Kunle Olajide, whose son is in 200 level at a Cypriot university, lamented the stress he is facing paying the tuition and sending money to the Computer Science student.
Olajide stated, “Since the administration of President Bola Tinubu decided to allow the naira to float, it has not been easy to source forex for the purposes of paying my son’s tuition and sending upkeep allowance to him. My business is essentially naira-denominated and you know that the currency has been consistently falling and this is putting a lot of pressure on me. I am currently spending almost double what I was spending on him this time last year.
“I have filled Form A since mid-June to buy dollars at the official I&E rate, but my bank keeps complaining of not having the currency to sell to me. Even the exchange rate on that platform keeps rising. When my son mounted pressure on him about being denied access to the school portal, I had to go to the parallel market to buy $2,500 at N889. I understand that it is now over N900/$.
“Honestly, I don’t know how I will continue to fund his education going forward without crippling my business and affecting the rest of the family. I have two other younger children who are in private secondary schools here in Lagos. When they resume later in September, I will have to cough out a lot of money because the schools have increased the fees in line with the inflationary trend and the after-effects of the removal of subsidy on petrol by the Federal Government.”
A Lagos-based businesswoman, who has two of her children schooling in the United States, Mrs Adebusola Adeyinka, said before the floating of the naira, sourcing forex to pay for her children’s fees and meet other needs was nightmarish.
According to her, the older son, Tinuade, is studying at the University of San Diego, California, while the brother is rounding off his A-levels.
Adeyinka said, “Before now, I would have to apply for the purchase of dollars three months ahead. Earlier this year, when I knew I had to renew my children’s fees after summer, I applied for forex, and up until May, the bank kept pushing me around.
“I made sure I had enough naira in my account, but it was not just that. The officials in charge told me to keep checking with the bank to know when it would be my turn. They claimed that some people were in the queue before me, and the time was drawing closer for me to renew my first son’s accommodation.
“After a few weeks, the schools started harassing the children. I had the money in my account but it was in naira. The school needed dollars. My children were about to lose out on their admissions.
“I got frustrated and used a BDC (Bureau De Change) via peer-to-peer transactions, but the rate was so expensive. I had no choice but to use that option.”
With the floating of the naira, the mother-of-two said things became a bit stable.
“Apart from the ever-fluctuating rate, now, I just apply directly and get the forex within a defined time. The application is done to the CBN through my commercial bank at the official rate. Once the CBN approves, the bank sends the money to my sons’ respective schools and everybody is happy,” she added.
The father of a Medical student in the United States of America, Mr Olabode Rotimi, said he always made sure he applied for forex long before he would need to pay for his son’s fees.
“It is better the money is in the school’s account than for my son to be sent out of school. These foreign universities don’t listen to any complaint or understand the hitches we face here; they simply send your child back home if you can no longer afford to pay the fees,” he said.
On how he used to get the forex before the floating of the naira, he said, “I simply patronised Bureau De Change operators. They are more reliable. They will demand more money, but you are sure to get the forex remitted into your account in due time.
“I haven’t really used them since the floating of the naira anyway because I heard that they are also affected somewhat.”
Another parent, who is also a popular politician in Rivers State, said he used his ‘contact’ in the CBN to facilitate the remittances of forex to his daughters’ universities.
“When I used commercial banks, it used to be problematic. If the forex is not there, they’d say I would have to wait for 90 days. I could not wait. I asked some friends who told me how to apply directly to the CBN and fast-track it,” the source said.
A civil servant in Lagos State, Mrs Bola Hamzat, said her husband, who is an engineer and contractor, was getting very moody in recent times as he struggled to pay the daughter’s tuition in Canada due to the pressure of sending money abroad.
She stated, “I am now very careful with my husband as he gets unusually moody nowadays because of the pressure he is facing to raise our daughter’s tuition and accommodation fee. Our daughter is about to resume for the second year of her degree programme at a university in Alberta. Though things were tough when she started, the exchange rate was, however, not this high. Though it was taking time to get our applications approved, we were still getting forex at official rates, which were about N200 cheaper than the parallel market rate.
“However, after the floatation of the naira, it has become extremely expensive to buy foreign currencies with the naira. Even at the official I&E window now, the rates are exorbitant and the funds are not easily available, so we rely on the parallel market to get forex. At a time before May 29, 2023, we were getting the US dollar at around N460 at the I&E window, but that has almost doubled now.
“My husband had to set aside about N20m from his company’s account as proof of funds when our daughter secured admission after paying about $6,000 for tuition and accommodation. To renew these now, he has to look for almost double naira equivalent and that is driving him mad. He doesn’t want to be seen as abandoning his daughter’s education and at the same time, his firm is battling insufficient funds to execute contracts given to him by clients.
“I am trying in my own little way to support him, but my brother, how much am I earning as a grade level 14 civil servant? To compound the problem, transport fare is taking a chunk of my salary and we still have to survive at home. My daughter is trying too as she is supporting with the little she is earning by working even as a student.”
This has further led to increased patronage of the parallel market with many students seeking admission abroad reportedly purchasing forex from dealers ahead of the resumption of school activities in September after the summer break.
The COVID-19 pandemic in 2020 and the subsequent crash in global oil prices threw into chaos the economies of many foreign exchange-dependent countries like Nigeria.
While the CBN has managed the allocation of forex to banks for the payment of school fees and other invisible transactions since August in 2020 when schools started resuming from the initial global lockdown, the situation has become especially tough for foreign students.
Some Nigerians studying abroad, who spoke to our correspondents on Saturday, said they were frustrated due to the scarcity of Form A to procure foreign exchange for their transactions.
Form A, which is an application form designed by the CBN to pay for service transactions such as school fees, medical fees, and more, allows customers to purchase funds at the CBN or interbank rate to make payments for these services.
A student in the United Kingdom, Williams Awara, who narrated his experience said, “My experience was hell in a handbasket.
“I was hoping to pay my last deposit with the Form A. But the new forex rate made it impossible. I paid in pounds sterling since I got here.
“New students coming in this September have spent so much with this new forex rate.
“A friend of mine paid N5.5m for £5,000. This is what he would have used N2.5m or N2.8m maximum to pay with Form A.”
A Nigerian, who identified herself as Miriam and got an admission into the University of Hull, United Kingdom, said she almost missed the payment deadline due to the non-availability of forex.
Miriam said, “The naira floating is not making things easy. The banks do not have forex. The black market still overshadows everything.
“I had a payment deadline that I almost missed due to non-availability of forex.”
A student of the University Canada West, Jane Idabor, said she managed to escape the challenge, noting that some institutions did not accept forex for tuition.
Idabor noted, “It was way easier for me because back then, Form A was still in use.
“However, it is now challenging for people as some schools do not accept forex for tuition.”
Also, a student of the University of Law, UK, Oluchi Onyeama, said she gave up on getting forex from Nigeria after encountering challenges.
“It was not easy. I had to get pound sterling here rather than wait for Form A from Nigeria,” she stated.
Another UK-based student, Victor Chukwu, said that he was sponsoring himself, adding that forex challenges were affecting his rent, transportation and feeding.
Chukwu stated “I sponsor myself. Obviously, the cost of living and paying fees is very high because foreign students pay higher. Without forex, rent, transport fares and living are impacted.”
Parents too are not left out as they are feeling the brunt of the forex challenges.
An Abuja-based parent, who has his child studying in Canada, Anthony Momodu, said due to the forex challenges, parents might start having a rethink about sending their children to schools abroad or transferring them to cheaper schools, while others might consider withdrawing their children and enrolling them in schools in Nigeria.
Momodu stated “For middle-class families, the foreign exchange challenge has made most parents rethink about sending their children abroad, while for those already studying there, the parents are thinking of transferring their children to schools in other countries that may be cheaper.
“This has caused a lot of trauma for students themselves because their pocket money has been slashed. The parents used all their resources to pay their children’s school fees.”
Another parent, who spoke on condition of anonymity, said, “Last year’s stress and pain cannot be compared to this year’s.
“It is not easy to get these foreign currencies. It is very difficult and traumatic for parents. The naira has been devalued. It is very difficult to make transfers.”
A Rivers State-based parent, Mr Tamunotonye Ibulubo, said even with the recent floating of the naira and the unification of the exchange rates, getting forex to pay the fees of his son, who is in a university in the US, had been difficult.
Ibulubo said his son was in his second year and studying Social Work at a US university.
He stated, “I have even been duped before by a bank worker, who promised to help me. I gifted him N20,000 to help facilitate it. The banker later said I should pay another N15,000 so that I could join the latest batch of those waiting for dollars. Even after all these payments, I still have not had access to forex.
“Whenever I get a call from my son, I feel sad because I cannot do anything to help him. If not for a church there that he identified with, maybe, he would have been sleeping in the open.”
Ibulubo added that he tried to borrow from his cousins abroad to send directly to the school, but it had not been easy for him to get someone willing to give the sum he needed.
He also claimed to have approached the CBN in both Rivers and Bayelsa states but was told to approach his commercial bank for direction on how to access forex.
“It is frustrating to be honest. I don’t even know. They (banks) even said I would not be able to use the I & E window as, according to them, it is not meant to address my kind of need. I am really confused. I have not been abroad before, but I want my child to have a better life, which was why I sent him there. Now, this country is frustrating me; I need help,” he added.
An Ibadan-based public servant who works for a Federal Government agency, Mrs Oluwaninyo Clement, whose daughter left for Toronto, Canada, two weeks ago for a nine-month diploma course, said if not for the fact that she had a brother in Canada who had been supporting her, the dream of sending her daughter abroad for further education would not have been realised.
She said, “I started buying US dollars more than a year ago when my daughter finished her first degree here and was undergoing the National Youth Service Corps mandatory service year. Initially, my husband and I as well as our daughter were pumping all the naira we could save into buying dollars, but when the CBN made it difficult for the Bureau De Change operators to get the currency, we had to slow down.
“It was at this point that a lifeline was thrown at us by my brother, who is based in Canada, told me that he had a friend who needed naira there and was willing to sell the US dollar to us at N705, which was a very good deal. He also helped us to buy $1,400 Canadian dollars at N530/C$, which translates roughly to US$1,090, and I had to look for N742,000 to send to his naira account in a Nigerian bank.
“He was also very helpful in paying part of the C$21,700 school fees so that my daughter could get her student visa, which will also enable her to work part-time while studying. When she was applying for the visa last year, we had to raise N15m as proof of funds, but I am sure that will be more than N20m now. We also spent around N1.5m on a one-way ticket to enable her travel.
“Since I started working almost 15 years ago, I have not been able to save up to N1m at any given period, but when my daughter’s ambition to study abroad gained traction, I had to look for money from where I didn’t even imagine before. We are just praying that after study, our daughter will be able to get a work permit and permanent residency and pull her sister, who is still an undergraduate in Nigeria, to Canada.
“The stress is too much. If it is now, there is no way we would have been able to send her abroad to study.”
No fewer than 78,679 international students from Nigeria are currently studying in the UK, US, Canada, and Ukraine, according to official figures. The number excludes Nigerians who study in these countries but did not process their admissions from Nigeria.
According to the Higher Education Statistics Agency of the United Kingdom, as of December 2022, there were about 44,195 international students from Nigeria in UK institutions with average tuition fees between £11,000 and £32,000.
The President, National Parents Teachers Association, Haruna Danjuma, had in an interview with Sunday PUNCH pleaded with the Federal Government to intervene in the forex crisis.
Danjuma had said, “If you ask for my honest opinion, I will say the Federal Government should help all those involved because when you look at it, it is not their fault.
“Also, one of the reasons people even go abroad in the first place is because of the situation of things in our institutions. We need the government to work together with parents and academics to find a way in which we can solve the problems in the education sector.”
