Weak naira slows down japa rate

In this piece, TEMITAYO JAIYEOLA writes about how rising costs of migration, currency devaluation, and changing immigration policies are thwarting the dreams of Nigerians hoping to migrate

Leaving is the Nigerian dream. The average young working Nigerian saves and prays towards it as it is an escape route from the myriad challenges confronting the country.

Nigeria is currently facing one of its worst socioeconomic crises in decades and on top of this insecurity has spread to every nook and cranny of the country. As people are grappling with rising food prices, they are also scared of being the next victim of kidnapping.

As of the end of June 2023, 19,366 Nigerians had been abducted in 2,694 kidnapping cases across 10 years, according to the Nigeria Security Tracker. In 2023 alone, 4,049 occurrences of kidnappings were recorded nationwide based on data from the 2023 Nigeria Security Report published by Beacon Consulting.

The kidnappings are now so bizarre that people are no longer safe in their homes with recorded cases of home abductions on the rise. This is particularly exacerbated by sluggish economic growth, which has stayed below five per cent in recent years.

The World Bank recently stated that Nigeria's economic growth is too slow to address extreme poverty in the country. Inflation has remained very high and almost crossed the 29 per cent mark in 2023, indicating the skyrocketing prices of goods and services in the country.

Also, formal unemployment remains at record levels as only 12 per cent of workers in the country were in wage employment as of the end of the second quarter of 2023, according to the National Bureau of Statistics.

These factors fuel the passion of many young professional Nigerians to migrate, especially through the study route. 141,000 Nigerians migrated to the United Kingdom between June 2022 and June 2023, according to figures published by the UK's Office for National Statistics.

Nigerian students and their dependents contribute about £1.9bn to the UK economy, an analysis by SBM Intelligence found.

In 2022, 22,085 Nigerians were admitted to Canada as permanent residents, and in the first half of 2023, Canada received 10,180 new immigrants from Nigeria, according to data from Immigration, Refugees and Citizenship Canada.

Nigerians spent about $1.01bn on foreign education in 2022, a 40.36 per cent increase from the $720.05m that was spent in 2021. They spent $896.09m on foreign education in the first six months of 2023, according to data from the Central Bank of Nigeria.

A recent survey by the Africa Polling Institute indicated that 69 per cent of Nigerians planned to relocate if given the opportunity.

A 2023 report by Phillips Consulting revealed that over 52 per cent of professionals in the country wanted to travel overseas. A study from SAP research disclosed that 80 per cent of Nigerian companies expect to experience a skills gap in 2024.

However, the Nigerian migration dream is fast becoming too expensive and increasingly unattainable. In June 2023, the Nigerian government removed the rate cap in its official foreign exchange market, allowing market forces to determine the actual value of the naira.

That immediately led to the devaluation of the naira. In July 2023 (about a month after the move), the national currency fell from 471/dollar to 750/dollar and 589.4/pound to 957.2/pound. As of January 24, the currency had further plunged to 887/dollar and 1133/pound.

At the parallel market, where most people meet their forex needs, the local currency exchanged 1,420/dollar on Friday.

In one fell swoop, the price of everything associated with relocation, including school fees, visa fees, and more has surged due to the significant depreciation of the naira.

As one expert, who did not want to be named, explained to The PUNCH, “The new exchange rate has caused a significant increase in proof of funds. This has affected current international students and future international students in ways that have brought tears to many.

“At the moment, current international students can't pay their fees because the rate has increased by over 50 per cent. International students have resorted to paying in cash from their respective currency rather than changing the money to their home country's currency.

“The rise in the new exchange rate has been detrimental in the following ways to proof of funds. Increase in the rate of borrowing money, and sales of property to raise funds. Families are cutting down on the number of family members to relocate to the UK.

“Students that have saved money for years to pay for their initial deposit can't pay because the exchange rate has increased. Currently, they have no option but to put a stop to their travel abroad plans.”

An educational consultant, Oyebode Omolewa, explained proof of funds as a student's tuition balance plus living expenses. According to her, it is a crucial requirement for students planning to go to the UK as it proves to the UK government that the students can take care of themselves while studying.

She highlighted that if a student's tuition is about 15,000 pounds, they pay 5,000 pounds to the university, and their proof of funds will be the 10,000 pounds balance plus living expenses.

In an earlier interview with The PUNCH, Omolewa said, “If the school is located outside of London, the cost of living is 9,207 pounds. If it is in London, it is 12,006 pounds. Let's say we have a 10,000 pounds balance, if the school is outside London, which is 9,207 pounds, when you add the two together, you will have 19,207 pounds multiplied by the exchange rate of the day you applied for a visa.

“If it was N1,000 on the day, it would be 19,207 pounds multiplied by N1,000. Before, it was about N580 multiplied by 19,207 pounds.”

PoF had doubled, she noted. Already, many Nigerians are struggling to pay their fees in the UK due to the devaluation of the naira.

Recently, a student at Liverpool John Moores University became stranded after the school withdrew his access to the school portal following his failure to pay his tuition.

The Nigerian (name withheld) could not raise the required 4,800 pounds to complete his tuition. He told The PUNCH, “The school has withdrawn my access to its platform. As a result, I can't check the results of my last exam. Everything is done via the platform. I cannot also access my official email given by the school. I can't attend both online and in-person classes again. It is very frustrating. I am completely shut out.

“In fairness to the school, I was given several deadlines which I missed. I could not pay because I was unable to raise enough funds to buy foreign exchange. The exchange rate is very high.”

Another student (name withheld) of the school, said he was on the verge of losing his studentship before he managed to borrow money from friends in Nigeria to pay his tuition.

Aside from the cost of fees, airfares have skyrocketed. Flight costs to London from Lagos are now hovering above N2m.

One travel agent, Tolu Omolade, told The PUNCH, “Depending on the airline, it is from N1m and above. You could travel with less than N1m before.”

Another agent, who gave his name simply as Chimaobi, in an earlier interview with The PUNCH, noted that the reliance on the black market for currency exchange because of the scarcity of FX in the official market had further exacerbated the costs of the various aspects of international travel, from visa fees to hotel bookings and airfares.

He said, “It has been quite tumultuous lately, given the fact that people are opting for the black market.

“Foreign travellers have to source Basic Travel Allowance from black market traders, and we also rely on the black market to pay visa fees and make hotel reservations.

“It poses a significant challenge because you end up spending double what you could have if the forex is obtained from the banks. However, the most striking concern is how the black market traders can readily provide dollars in whichever volume you want, yet the banks do not have them.”

According to Chimaobi, the situation has led to a hike in ticket prices, resulting in low sales, adding that other payments involving the dollar are also being affected.

He remarked routes such as Lagos-London, which was formerly less than N800,000, currently cost a minimum of N1.3m.

However, the President of the National Association of Nigerian Travel Agencies, Susan Akporiaye, believed that there was still a huge demand for international travel from Nigeria.

Akporiaye said, “If you compare the school fees of $10,000 from early last year to what you will pay now, there is a 300 per cent increase, and yet the demand for education abroad has not reduced; it keeps increasing despite the high costs.”

To compound issues, the governments of the UK and Canada (two of Nigerians' favourite destinations) had rolled out new relocation policies, increased visa, immigration health surcharge, and language exam fees.

This directly impacts the cost of immigration for Nigerians who need to pay those fees as part of their application process. For the second time in months, the British Council in Nigeria announced an increase in the fee for its English Language Testing System examinations by 29 per cent in January.

According to a notice published on the councils' website, applicants will now pay N139,000 for the Computer Academic and General Training Modules from February 1.

It said, “The price change is associated with the increased costs of the delivery of our exams. This will enable us to continue to offer a wide range of services and comprehensive support to enable you to achieve your goals.

“Thank you for choosing the British Council.”

Five months ago, the council increased IELTS fees from between N80,000 and N90,000 to N107,500. This examination must be taken by most Nigerians travelling to the UK because it proves their proficiency in the English language.

Both the UK and Canada are currently reviewing immigration policies. The UK, for instance, had banned foreign students from bringing in dependents via the study visa route. Canada also recently announced the cost-of-living financial requirement for study permit applicants for international students, to $20,000 from $10,000 starting from January 1.

The fate of many young Nigerians now hangs in the balance as they feel trapped between the devil and the deep blue sea. Regardless, there is optimism that the Nigerian economy might turn a corner in 2024, which may reduce the urge to leave in many of these Nigerians.