 Ekonomi Nigerians spent 39.56 billion dollars on education, medical tourism, CBN Govno, Kadoso. I am Gola Aoba and this is PlusPolitics. Ekonomi Nigerians spent 39.56 billion dollars on education and medical tourism from 2010 to 2020. Mr. Kadoso in his presentation for the Nigerian lawmakers on Tuesday over the fall in Naira explained the challenges facing the Naira including the pressure from demand by students studying outside the country. He stated that over 100,000 students are currently studying outside the country, adding that the Nigerian students spent 28.5 billion US dollars outside the country between 2010 and 2020. Mr. Kadoso said Nigerians also spent 11.06 billion US dollars on medical tourism within the same period. Foreign education expenses amounted to a substantial 28.65 billion US dollars as per the CBN's publicly available balance of payment statistics. He said CBN does not have a responsibility to determine who imports or not. For that reason we want to ensure that we abide by our remit. 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. Looking at the demand side of the exchange rate, it's important to note the growing number of Nigerian students studying abroad. In 1980s and 1990s the need for US dollars for their living expenses was minimal. However, recent data shows a significant change. According to UNESCO's Institute of Statistics, the number of Nigerian students abroad increased from less than 15,000 in 1998 to over 71,000 in 2015. By 2018 the figure had reached 96,702 students as per the World Bank. Another report projects the number of Nigerian students studying abroad to exceed 100,000 by 2022. Additionally, the UK's Higher Education Statistics Agency noted a 64% increase in Nigerian studying in the country, rising from 1320 in 2019-2020 academic session to 21,305 by the 2020-2021 session. Given this data it is crucial to highlight that between 2020-2010 and 2020 foreign education expenses amounted to a substantial $28.65 billion as per the CBS publicly available balance of payment statistics. Similarly, medical treatment abroad has incurred around $11 billion in costs during the same period. Consequently, over the past decade foreign exchange demand for education and healthcare has totaled nearly $40 billion. We are also joining us economic analysts, Muntau, Muammar and Shago Shokuton. We are also joining us is the development of macroeconomic analysts from the UK, first of all, Tokumba. Tokumba, I guess you will be the most appropriate person to start with. The central bank governor is certainly, without criminalizing you people, certainly letting Nigerians know that with the kind of heart of young Nigerians going abroad to study and their fees paid by their parents and guardians in Nigeria, that leakage is a big worry on any economy. Unlike a banker, we tell somebody whose balances are not okay, I can only tell you that this is your balance, you cannot fault me for owning your account now. I will be respond to the remark of the central bank governor. Thank you for having me on your show. First of all, what I have to say is that Mr. Kadoosu's analysis is a layman's analysis of the fundamental course of world currency crisis in Nigeria. About a month ago, I published an article titled, Nigerians become plural by unwisely following IMF and World Bank policies. That article was published in four hours by the university in the US. Basically, there are four fundamental course of differential crisis in Nigeria. The IMF, the World Bank, the corrupt government and weak institutions. I mean, if you analyze the government that we are since we went to Sileon government in 1999, the PDP, where if you do the institutional analysis, we are a little bit more better than the APC. During the labor-buying government, when I was born in 2015, the estimate was $198 to $1 USD. When it was living in 2022, it was $422 to $1 USD. I'm not a fan of IMF, but in my opinion, IMF is the best methodology of managing the currency crisis in Nigeria by currency policy policies. IMF, for eight years, was at logger eight with the IMF and World Bank for introducing to completely adopt a market-led esteem regime. Because we face the reach and allocate currencies for essential goods and services that are very crucial to stabilize the price level. And despite the multiple exchange rates, despite the US subsidy fraud and the electric, the Nigerian price was still relatively stabilized compared to what we are today. When the price became present last year, the exchange rate was $422 official to the US dollar. Today, when at the black market, it also means trading at $655. Today, it is about $1500 nera. The reason for that is for adopting a market-led monetary rate. Okay, let me go to Muqtaw Mu'amir now. Muqtaw Mu'amir, in a way, is like your banker or my banker. My account is not looking pretty. It beors me. It is incumbent on me to find a way of changing my lifestyle or my productive capacity or indeed my expenses. It is not the fault of my banker that my account is joining me. That should be something that I should look into about myself and review my strategies of existence and the new profile to attend to. I will respond to the remark of the Centre for Economic Development in respect of not only foreign education expenses and indeed medical tourism. Thank you for having me. I think we are seeing a government that is stylishly blaming, putting the blame game on Nigerians because they decided to school abroad. It is not the policy that was introduced today. We are not the only country that have done those policies. We are the same government. Sometime ago, one of the ministers, I can remember, said that Jack Barr is part of development. If you go abroad and you go to school, it is part of development. And I want to say, before the advance of COVID, Nigerian remittances in the diaspora was even higher than what we made in terms of profit from crude oil. They also play a role in stabilizing the exchange rate for a very long time. I think we are just, like the guy in London said, he is just talking common economies rather than dealing with the fundamental issues that are affecting the Nigerian economy. I have said that Niemi Khaidusu is a policy man and he is trying to use policy to stabilize the Naira. You cannot stabilize the Naira policy. You cannot stabilize the Naira with monetary policy, not administrative policy by saying, oh, you will not give FFs like he said. They have done this thing. It is not up to six months. The exchange rate has hit 1500. And we don't know where to go tomorrow. So for me, I think they took some decisions without looking at the consequences. They are good decisions. I totally agree with market determination rates and investment into your economy. But again, for you to be market-developed exchange rate, you must have the liquidity. I want to mean by liquidity, no central bank in the world lies currency to float without intervention. Now what we have seen is that we decided to float the currency without the liquidity. You don't leave your currency for market forces because market forces are there to make gain. They are there for profit. So they will definitely better your currency especially if you don't have the liquidity to intervene. There is no part in the war, no CBN war that allows currency to just go on India. There must be an intervention. In China sometimes when they realize that the goods and services is higher than that in the US, they devalued their currency to make their goods and services cheaper for other world. And when China devalued their currency, America begin to shiba because that means their goods will come down. So those CBNs made to create market stability. And here you have a government that is like he said, were import driven. Majority of what we take, we import it. And this is a government that came and met a rate of exchange for imports of goods at 419 Naira. And have moved it to 1,410 Naira. And you say you want the economy to strive. How will it strive? And also the cost of goods has gone up. Meaning when you are moving the productive tariff in the productive sector that brings that great job, you are moving that tariff by 1,000 to 1,410 Naira. And then the consumption in terms of budget, you are putting it at 800 Naira. So what are you trying to do? Why are you not putting the import due to steriff at 800 Naira? And then then take your consumption to 1,410 Naira so that it will reduce your amount that you want to consume. Then you begin to look at, like you said, means of balancing. We don't have this to say. But I think unfortunately we have an issue in our hands that the way they are going, if something is not done soon, we will be behind the price. Let me go to a fellow economist like you, Mr. Sherwin Shoputan. Mr. Shoputan, what would ordinary people have thought that the people on all these amount of money were spent in the quoted decade are also the people power the 20 billion US dollars plus annual remittances to Nigeria an amount that conveniently competes with the average annual budget of Nigeria. So something is telling me that if they are good policy strategist they should be looking at amassing the current forex generating ability of these people by either improving on the real level improving on the opportunity that those people can invest in Nigeria the annual remittances they sent to sustain family members. So maybe if Mr. Yemeka those who are thought deeply enough would have known that the money spent on education in the last 10 years on genius in the diaspora especially in the northern hemisphere is actually one of the invisible sources of wealth for the economy. Maybe that is why the economy has not literally collapsed. I have just been allowed. I would want to respond to his remark I mean you are absolutely spot on it's extremely ingenious for the government of the central bank to say something without due respect and apology to anyone whoever might offend it something as pedestrian as that you do not look at your policy management your foreign exchange rate management framework and begin to blame individual and independent segment of your entire trade activities that's what this foreign currency school fees, medical expenses that's what they are they are just a segment of your overall trade activities so you now say oh it's because some people are going to school that's why there is so much pressure on exchange rates excuse me that's not good enough that's not it should be below the level of thought that one would expect from somebody that is holding an office as high as Mr Cadoso is holding an office as sensitive as Mr Cadoso is holding the reality is that your population you have a 200 million population my goodness people will do all sorts of things it's like when they say that a man that has many children there is no way you will not find one one blind man maybe a crazy person because there are so many so if you have a population of 220 million you are absolutely and inevitably going to have a segment of that population that will simply desire to accept your external capacity especially when you don't have a coherent human capital development strategy that will that will annex and develop the number of population within your borders exactly so if you have a situation where your educational sector is cannot compete let's be honest with ourselves in the 80s people from abroad a lot of us that went to university in those days we had classmates from Ghana we even had classmates from white skin people coming to Nigeria to come and spoke and then you had white skin people lecturing and teaching in Nigeria it's now the other way around now Nigerians are going because those things are deteriorated and medical services are completely debakulous so people have to go to Ghana and South Africa to get healthcare rather than stay in Nigeria so Mr. Kakuso is not talking about structural problems that human beings will do which is to look out for their own interests what Mr. Kakuso is supposed to do and there is something you said that I think is absolutely critical a diaspora community an investment there is seeds that Nigerians have sold we have thrown the seeds into the world and because they are still rooted back home they have fathers, they have mothers Mr. Tokumba is there I'm sure majority of his family is still in Nigeria economic activities that he can do in Nigeria what Mr. Kakuso and other policy makers should be doing at this time is to see how they can actually move our average 20 billion dollars per annum from 20 billion to maybe 40 to use policy instruments to use regulatory instruments to use investment instruments to attract funding beyond subsistence funding beyond subsistence funding from this community to look for how we can create funds for diaspora if you look at India India was very deliberate in harnessing the funds that these diasporans can send home they have the diaspora they call it the NIR diaspora are forgotten name of the account they have the special account type that is specifically targeted at Indians living abroad because they recognize that they have so that's what Mr. Kakuso and his colleagues are supposed to be doing look at this community how can we get them to send more money home into sectors of the economy target their funding target their spend to ensure that we are deliberately harnessing these guys to develop our economy and then the other thing to say is invariably the value of your currency will be determined by two things there are two tripods not three now two trade issues do I export enough and all of that the other will be policy you can buy by monetary policy instrument by fiscal policy instrument be very deliberate in attracting liquidity into your market foreign direct investment foreign portfolio investment grants loans all of these things have very little to do with export with trade our policy framework is such that these privileges inflow free influence free outflows of foreign exchange which is one of the reasons why we are having this currency now the other point there is something about the domestic the DCA this NFC practice where they are allocating domestic food allocation a specific proportion of our food production is allocated for consumption locally and is paid for in Naira this policy started about 18 years ago and has consistently has an adverse effect on our forest earnings from crude this is one of the major problems that we are also having all of these things Mr. Khadusso is not talking about them he is talking about diaspora let me go it's not good enough let me go to Tokubo Tokubo a development and macroeconomic analyst you I would rather want to where you take a panoramic view at the policy table of this government from the trade policy to the monetary policy or basically the global picture of how because there does not seem to me and I don't pretend to be to be experts like you guys to be an expert like you guys but there does not seem to be policy coordination there does not seem to be policy coherence people typical of Nigerian administrations it is not peculiar to this administration when it was the same in Mexico it was at some point becoming the factor the factor minister of finance government of the central bank almost chief of staff to the president minister of economic planning and I can see this administration maybe need to combo I can see this administration almost enacting the same trade comedic policy melodrama I would want to respond to that as you have rightly said I mean the failures of president and the president is macroeconomic failures government it is important that both fiscal policies and monetary policies are aligned to create a sustainable development if you analyze our fiscal policies both are borrowing government follows to sustain the economy to find out the budget but it is essential the very important that you engage in sustainable borrowing only give an example during the government of Bahrain we have two main sources of funding of loans we have the American basically IMF and World Bands why the trade loans were invested basically were used to build the seaport in Lagos the train transport that connected the major regions in Nigeria and the airport look at the longer round ground they will contribute to return monetary revenue as a matter of fact the transport will increase because of the trade system but when examine the IMF in the past 8 years they were being used to finance subsidy they are bad loans the IMF will not give loans to invest on infrastructure development but in 2020 they won't do that and when you consider the monetary policy as I said earlier on the market rate is not suitable for Nigeria let examine Nigeria as an example if we examine Nigeria as GDP the IS sector is the services sector in those sectors we have the banking we have the telecommunications let examine the telecommunications the biggest app cost in that department is NTN and it shows that NTN makes about $10 million every day by Nigeria that are purchasing air time for their mobile so what I am trying to say is that to stabilize the macroeconomies to drive to drive the development in Nigeria governments are to be actively involved we need to promote policies that improve local production of good and services and that depends on electricity the the bill that we are not signing to law this year this year but before then the government need to promote policies that maneuver the market the monetary the monetary aspect of the economy market is also sustainable my colleagues talk about the remittance Nigeria is the IS the 7th IS remittance countries in the world 34% are related to soft and hard capital to Nigeria but this remittance do not contribute to our liquidity do you know why? because most of the actors there they think that they are fintech they are foreign companies in the UPA we have LEMFI we have PESA PESA is a Canadian company when I send money from here to Nigeria PESA uses my money and pay in NERA they pay you in NERA there this fintech company we take this for account to manipulate our currency market this remittance do not contribute to our liquidity so that's why the government Nigeria must be involved in managing the economy you cannot leave everything for the market if you have a market that damages the interest rate and the exchange rate that will destroy the socio-economic variables that will stop in Nigeria at the moment so I come back to you but to be honest with you when you keep saying they cannot leave everything to the market they cannot leave everything to the market are you suggesting are you suggesting a controlled economy are you what I'm suggesting is a controlled monetary policy SDR is physical because the SDR determines the price levels the MEPHELA method is a fantastic method MEPHELA said he went to the US he said Nigeria is spending about 30% of his money to import fuel he said when the Bangladesh is truly operational that will help our liquidity then what he said we cannot allow the market to determine our fuel prices it's not possible we need to practice our currency and allocate forests to essential goods and services that will stabilize the price level that the fuel prices we may call the main reason of doing that is because of attracting international and investment and since they adopted this policy how many people are there how many billions are they brought to the country even a 15 billion dollars let me go to your colleague Muhtar Mohammed Muhtar we now have to be speaking to ideas to help if we don't see any form of policy discipline or policy articulation that is tidy and it's like every principal officer of the government especially in the area of the economy indeed I was shocked when the minister of finance and the coordinating minister of the economy had the temerity to say that the economy was in a better place when you must relate to when they came to power on the 29th and I was thinking is this gentleman living in Nigeria or we just could be borrowing from Ulalaland but what are some of the ideas that somebody like you would like to put on the table at least let's put ideas out there we never know who amongst them may get to watch these and let's see whether things can be turned around for the better Muhtar okay thank you for me I think we should look at and homegrown economy policy the era whereby we do this copy and paste method where they hike rate in America they bring down rate I think we should look at how we can own our economy we could see that happening in the equity market if you see Nigerians running that space now about 90 percent 95 percent of what you see happening in the equity market is run by Nigerians and we know how those kind of running out of the economy like the normally how people have crisis so I think we should look at bring homegrown economy policy now the world has become a global village so you cannot isolate yourself like China did isolate themselves we should begin to look at tax as a way to grow our economy we shouldn't just looking at tax as a means to get revenue I've said it over and over what we've seen in the government is when they look at tax all they think is how much can we make they are not looking at tax to say how much can this company bring into our economy how many numbers of Nigerians will be able to we are not looking at the revenue lockdown I'll come back to you on this but given that point you just made we have a political culture where anybody who unfortunately to Nigeria but who is fortunate to be giving a political position just believes that he can send a trophy or a fog out there ాదెకిపెకినికిండిక్బకి. పివర్షికిడాడాలికంచింవైకికికికికికాన౿కి. I don't care if the economy is triangulated, just go get anything from anybody, whether that person is an Okada, is in a car, he has a shop, he has anything that is somewhat as much as that point of the new generation is at a church or a mosque, just go and shake them down. That is our tax, that is our fiscal mentality. I wonder any economy that will go under that kind of mentality. I am just thinking aloud. Yeah, I agree with you. Even the presidential committee chairman for tax said that we should use area powers at a point, even if he came out to deny that he didn't say that. At the point he was saying why can't we use area powers to collect taxes, but later he said that is not what he meant, but definitely he has sent the message. And if you stay in Lagos you realize that there is multiple taxation everywhere and there are the towns that they use. It doesn't mean that everyone is here, all this is political. Okay. How do we look and carry out this country? For me I think we have not looked at that space. Then one key driver of the Nigeria economy is the informal sector. How have we been inclusive in that sector? How have government been able to help that sector grow? Why are you thinking of a hiking rate to attract foreign investors so that they will buy your treasury bills and others? And then you have a local industry that provides jobs to over 70% to 80% of Nigeria. Rather than help them grow, you are starving them of cash, you have come with cashless policy. And you know the irony on that very point that you just made. You know the irony, an aspirant Bola Mehtimungu, a candidate Bola Mehtimungu was actually saying that it would make it a matter of policy for interest rate to come down so that the drivers of the economy like those people that you simply mentioned, the micro, small, medium entrepreneurs will be able to access capital to inject into their business. But I guess we can turn to poverty and you go on in... No, there is a saying that says that talk is cheap, anyone can talk. And I think all we have seen in this government, they keep talking like you talk about the coordinating minister. Saying that we are on the right path and I ask myself that we have attracted about $800 million in terms of investment. And then I looked at the exchange rate at when you came in. What is $800 million now to stabilize the exchange rate? And you look at when you came in, what was the price of goods and services? You had government, you came in, you just think of increment. The three sectors of government, I mean the three armed government, the executive, the states and also the local government have received more allocations since you came in. The last time we had what they have about $3.3 trillion. But yet the people are hungry. You came up that you were going to release the reserve of bag of rice that was December before Christmas. We never saw anything. You came up, you just say what the people want and then you don't add it up. I say it and I say it categorically. Yemi Kadoso is a policy man. He is the second policy man that we are having in the M of CBL. He comes with policy, he deals with policy, he believes in policy. Policy can be stability in the short term. But monetary policy is not administrative policy. Monetary policy is what will sustain your economy in the long run. You can come up with, don't give Nigerian diaspora impacts again to go to school. Nigerian year must compulsory school here. That will not bring down your exchange rates. That will complicate the issues. What you need to do is come up with microeconomic policy that will definitely attract investors into your economy. What we are seeing now is a government that it seems to lack idea. It seems to say what they want to do but they don't seem to be doing it. Let me go to your colleague Mr. Shokuto. Mr. Shokuto, we are now. The picture is a bit disturbing looking at the economy as it is. But we cannot just blame trading. It is imperative too that we put ideas on the table so that generations after will say at least some people put ideas on ideas. How would you want to go about it? I know that this guy is listening to this program so that is gratifying. We actually do need to do exactly what you are saying. We need to suggest solutions to our government so that they succeed. The first thing that we must tell our government is they have to look in words. They have to become ingenious. They have to be deliberately local in their thinking. This idea of pandering to the Bretton Woods Institution must stop. They are digging us into a deeper grave by going after the policies of the IMF and the World Bank. The countries that fund those institutions do not follow those policies. They don't randomly and indiscriminately remove subsidies. They don't randomly and indiscriminately devalue their currency. They do those things in a targeted fashion to achieve overriding medium, long-term development objectives. So our government, the first thing that I would say is think local. Think what's best for Nigeria. Forget about IMF. Forget about World Bank. Now, going to specifics. There are some basic fundamental things that government needs to think about. Look, let's forget all these high-falutin ideas, monetary policy, fiscal policy. If you fix power today, power does the problem of power alone. You will see the impact that this will have on development and economic growth. It's going to be an exclusive geometric, progressional improvement in angry things. Mr. Shokuton, somebody who is the supporter of this government may want to tell you, but after all, the first bill that President Bola met in Umbu signed into law was the decentralization of power and that that ordinarily should be an enablement for private investors, communities and states to solve their own power problems. Look, it's wanting to enact the law. It's another thing to implement it. What we are saying is that they need to drive the process of solving the fundamental problems. Just like we have had licenses on refinery given to dozens of so-called investors for more than a decade. Go on, go on. Sorry about that. Exactly, you know, so that it's not enough to just say, oh, we enacted the law, therefore solve the problem. No, you've not solved the problem, you enacted the law. Now you need to develop an implementation strategy, an implementation program with timelines and milestones that will tell us that we are in day one now by day 60, by day 180, by day 365. This is where we will be. And then go about implementing this in a methodical manner. That's on power on the informal sector. Mr. Shokuton, before you leave power, when the president announced that subsidy was gone, days after rolled out some very fantastic policies on the classification of power and for some of us, investors indeed, some of us, we send personnel to as far as Italy to go and learn how to convert generators and automobiles to UCNG. As we speak, that policy seems to be in somebody's file on somebody's table and nothing tangible is moving regarding that policy. And yet we are still buying diesel to produce basic things. We are still buying diesel at almost 1,300 to run every duty power generators. It's very unfortunate, you know. So talking about compressed natural gas and other forms or sources of energy for equipment, for vehicles and all that, it's one thing to just say these things in theory. As far back as three years ago, I did a study on conversion and I realized that this is something that is going to take many years to achieve. Conversion of an economy of an entire country from one source of energy to another is not something that happens in six months, it can't happen in two years. It's just the sheer investment that is required, the sheer volume and scale of implementation, project implementation that is required. We are talking of deploying gas dispensing machines across filling stations all over Nigeria that will take time, it's not going to happen overnight. We are talking about conversion plans, we are talking about the cost of conversion. These things will not happen overnight, you know. So when I heard that as an alternative under the well subsidiary, I just laughed because I have done a study on this before and I know that it's not cheap. The car, the average small sedan as at the time that I did this study about two and a half, three years ago would cost 300,000 Naira to convert to CNG. How many Nigerians in to build this economy? You are so right that as of today, at today's exchange rate, because an industry where I am so involved, only the directors of the company especially that focuses on human capital development in that sphere, as of today to bring in an average kit, for a sedan, a sedan automobile, you are now looking at today's exchange rate, you are looking at about 1.1 to 1.2 million Naira. I mean just imagine that. I mean absolutely crazy to think that that is the solution to our problem. And yet even if you brought it in and you have the competent technician to do the transformation, that's the conversion, you don't even know in a city as big as Ibadon there is only one refueling point by the experts. So in somebody who is in Bodega you have to drive to the toll gate to go on the phone or if you are in Nagos, there are just about three or four points in Nagos. So you have to deploy gas dispensing machines just like your normal petrol pumps across the entire country. You are talking of 36, just imagine the size of Nigeria, 926,000 square kilometres. How, what that will take. So it's clear that people did not think through this policies very well before they just went to town and implemented because they had met for same implement. So that's what I'm saying. So it's clear that people did not think through this policies that they had met for the same implementation. They had met for the same implementation. They had met for the same implementation. So that's what I'm saying. 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