How CBN new forex policy affects students in diaspora

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By Dayo Adesulu, Tare Youdeowei, Elizabeth Uwandu & Tivere Ogbakpah

Last week, when the Central Bank of Nigeria, CBN, rolled out its foreign exchange monetary policy, it was perceived by many Nigerian students as a step in the right direction aimed at alleviating the suffering of the citizenry, especially those who do business in foreign currency.

However, Nigerian students in diaspora, who spoke with Vanguard, say they have not felt the impact of the rise of the Naira, adding that students in United Kingdom pay in Pounds Sterling not in Dollars. Also many students claim that accessing funds through their bank is not as easy.

CBN forex policy

The CBN had published on its website that for any student to benefit from the forex policy, the student must make remittance directly to the foreign school’s account. This directive was with a clause that the applications shall not exceed $15,000 or its equivalent, per term or semester. CBN added that applicants shall provide their Bank Verification Number (BVN) to the bankers. According to CBN, applicants seeking foreign currency shall also present a duly completed Form ‘’A’’,  admission letter  and invoice from the school.

Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele

Reports reaching Vanguard revealed that apart from the difficulties many students schooling in the UK have in paying fees in Pounds, those outside the UK who pay in dollars are also having challenges in accessing foreign curriencies.

Following the policy declaration and execution, the different Naira/Dollars exchange rates in Nigeria as at February 21, 2017 are as follows; Pilgrims rate N197/$, PPPRA Model rate N285/$, Budget 2017 rate 305/$, Interbank rate N315/$, International bank rate N319/$, Travelex rate N345/$, Special funds airlines N355/$, Western Union rate N375/$, School fees/BTA N378/$, Bureaux de change N380/$ and Black market N520/$

Students’ ordeal

Joseph Arinze Edochie, a year six medical student of Ternopil State Medical University,Ukraine, disclosed that though the move of the Federal Government was a welcomed, the directive would be cumbersome for students, considering the long procedures necessary to transcat.

His words, “It is a very good move, considering the fact that a lot of Nigerian students outside the country are suffering, some have been expelled from the universities even in their final year just because they could not pay their school fees due to the steep fall of the Naira against the Dollar, availabilty of funds and the high exchange rate at black market.

“In addition to this most students have a deadline to pay their tuition fee as banks’ Form A transaction procedures are quite long. For substance a bank in Nigeria only attenda to people in need of such transaction once a week which does not suffuce, compared to the number of Nigerians students outside the country that need to pay for tuition.’’

Stubborn commercial banks

Edochie explained that despite the CBN’s directive for immediate implementation of the policy, commercial banks in Nigeria are yet to key into it. “It is as if none of the commercial banks in Nigeria has implemented the said new policy by the CBN. So, I think the Government should supervise the banks to make sure that they are really complying with the policy. Just as I feel the CBN should open more portals, rather than the single once a week portal for the transactions.

The restriction has not  helped the issue at hand either,’’ he  added.

On her part, Amarachi Chukwuma, a female final year student also studying in one of the tertiary institutions in Ukraine said the move of the FG is a bad omen, as it would make things more difficult for Nigerian students abroad to pay their tuition fees and withdraw funds for other necessities.

Limiting directives

She said: “The CBN’s directive has made it  more difficult for Nigerian students abroad to pay school fees . Before now, our parents deposit the money into our Nigerian bank account and we withdraw it here in the currency of our resident country, then we pay our fees. Now, limitations have been placed on our ATM cards and make withdraws, because the maximum transaction that can be done per month is now $100 (USD) and it can only be via online purchase or Point Of Purchase (POS).

“The other option we have is money transfer via Western Union; this is tedious as well. This is because there is a long list of bank customers who want to use  this it as well and the banks keep saying there is a limit to the amount they can send at any given time. This means that parents have to be on the waiting list for weeks before they are able to send money to their children abroad.”

On CBN being the intermediary, the final year student opined: “It takes longer for the fees to reflect in the school’s account and some students do not have the luxury of time as some are already on the verge of being expelled from school.”

Stranded TETFUND beneficiaries

Meanwhile, the over one hundred TETFUND beneficiaries outside the country said the new CBN forex policy has no impact on them as their situation still remains the same. “Our concern as students in United Kingdom is for us to be given the money in pounds sterling because that is the currency we use for payments,” they said.

Among the ten non-European Union countries sending students abroad for higher education degree, in 2015-2016, Nigeria population, according to UK Council for International Student Affairs, (UKCISA) emerged sixth with a population of 16,100.  In 2014-2015 it was 17,920, while in 2013-2014, it was 18,020. The statistics shows an average decline of 1,000 Nigerian students every year that patronized UK tertiary institutions. This may not be unconnected to the exchange rate of naira to a pounds sterling. According to U.S. Embassy:“Approximately 8,000 Nigerian students are currently studying in U.S. higher education institutions and 18th in the world for international U.S. higher education enrollment.”

Some of them, who spoke to Vanguard about their ordeal, noted that before TETFUND money was released to beneficiaries, the flexible exchange rate was N285 to a pound. A beneficiary and a lecturer with the Rivers State University of Science and Technology, RSUST, Engr. Tubonimi Jenewari, said: “We are now at the mercy of black marketers who sell a pound for N600 and above, because even the bank rate of N440 to a pound is not available.

“The money that was released to beneficiaries was released before the flexible exchange rate of N285 to a pound. TETFUND was supposed to release the money in the currency of the country to our respective universities in Nigeria which would in turn release to beneficiaries in tranches according to the duration of the programme.

Pounds, unaffected

“Before I left for the programme, I wrote them to do the needful, but they replied saying once disbursed, nothing can be done. So our fees have not been paid, we are now using the money for only upkeep.  I came to UK on TETFUND scholarship in October 2016 and will be rounding off my course in 2019,” he said.

Also, Engr Abraham Wiri, from RSUST, who is doing his Ph.D at Loughborough University under TETFUND scholarship, noted that the major issue in the UK is the payment of fees and transfer of funds from the CBN.

He said, “When I came to UK in 2015, my funding was based on N250 to a pound, but now, it is N600 to one pound. Because I am now in my second year, I cannot pay fees based on the former rate. I have already filled the form for cash transfer but till now, the form is still with my bank. TETFUND is reluctant about our appeal for additional funds. I have been receiving emails from Loughborough University for payment of fees.

Black market solution

“My bank keeps telling me that I have to source funds from the black market to pay fees. Right now, I can’t move to my third year because i have no access to transfer of funds.”

Speaking in the same vein,   Engr. Igwe Ikechi, also of RSUST, urged TETFUND to listen to their cries, adding: “I spent all the money they gave me for this year in the black market to pay my fees only. They approved our funding with an official rate of less than N250 to a pound.  Currently, it is about N600 to a pound. They said that it is 100 per cent sponsorship but right now it can barely pay for tuition, much less living expenses.”

Daniel Asuquo, who is studying  Architectural Designs at KTG Education Group, Malaysia said:  ‘’I have not been  informed about this CBN new policy on forex, however, we are  still passing through the challenges over here, as CBN keeps reducing the withdrawal limit abroad and the charges keeps keep going up.

Pros and cons

‘’An advantage of the policy is that we had to learn how to spend wisely because there are limits to financial sources. A disadvantage is that it limits potentials. Being in a foreign country, we have to receive allowance weekly or monthly from our local banks. However, due to bank charges, am not always able to keep up with certain payments which make me  owe my college and other people.”

Slyvia Funmilayo, who recently graduated from a school in London, narrates her experience thus; “My brother, sister and I all schooled in England. My sister was in University of Birmingham while I went to London South Bank University. Initially my Dad will pay Naira in my account while I withdraw pounds but Nigerian banks stopped allowing pounds withdrawal based on a CBN directive, so I had to result to transferring the Naira to someone here and the person gives me pounds at black market rate.

Work to pay

“They started making life difficult for us by reducing withdrawal amount on POS and ATM, and then the outright stoppage capped it up. The constantly falling Naira added insult to injury as I had to result to working and schooling. I had only 20 hours a week to work and being in London all my earnings went for upkeep; housing, transport and feeding. The current interference of the CBN will soften the burden on those in America or Dollar receiving countries but not Pounds paying countries. They brought it on us in the first place. I have graduated now, I survived. With the hardship, I look back and marvel that I survived.”

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