It is not uncommon to see Nigerian students travelling abroad to complete their university education in order to avoid the ‘stress of schooling at home’. Of course the luxury is not available to all, but the opportunity is mostly taken by the smart and or wealthy.
During my time at university in the UK as a home student, I remember several of my Nigerian friends expressing their concerns about the exchange rate being unfavourable. Parents were seriously struggling to pay school fees and maintenance costs.
They were sending money desperately through the black market, taking out loans and doing whatever was necessary and within their power to make ends meet. So the question is, is it all worth it, and if so, for whom?
In 2015, the naira greatly depreciated and Buhari refused to devalue it. Thus, the foreign currency exchange rates were extremely unfavourable for Nigerians. When questioned about parents struggling to pay international school fees by an Aljazeera correspondent, he candidly responded,
“Those who can afford foreign education for their children can go ahead but Nigeria cannot afford to allocate foreign exchange for those who decided to train their children outside the country. We can’t just afford it. That is just the true situation.”
This put things into perspective. Those who can afford to, send their children abroad and those who cannot, either seek scholarships or school domestically. Buhari’s lackluster attitude was evidence of his disinterest in the importance or threat of students schooling abroad. Rather, his focus was directed towards foreign exchange.
Whether we want to look at things this way or not, the decision to school abroad is an economic one; it involves considering the costs and the benefits. For the individuals, they will consider the costs of tuition fees, maintenance fees, foreign exchange fee fluctuations, travel costs, visa fares, the emotional task of settling down in a foreign land, and so on. Weighing them up against the benefits of better educational resources, greater access to better lecturers, stronger infrastructure, networking opportunities, improved future prospects and a potentially more attractive job trajectory, to name a few. Amongst other things, it is down to the parents and sponsors to consider the options and decide whether it is all worth it. Essentially, the decision is one which is self-oriented, in other words, focused on personal gain and rationale.
Alternately, from a macroeconomic perspective (one which considers the production, consumption, and transfer of wealth within a whole country), studying abroad has potentially positive consequences such as improved human capital (all the benefits that humans bring to an economy such as knowledge, skill, labour, creativity etc.), diversity of experience and thought, greater connections and remittances (the transfer of money home), all contributing to economic growth. However, this is based on an assumption that those who leave will return shortly after graduating. If not, then Nigeria would experience a ‘brain drain’; that is, the emigration of highly educated and skilled individuals from developing to developed countries.
These factors endanger the growth of the economy, possibly lowering the productivity of Nigeria, leading to even greater income inequality between Nigeria and other economies. This may be discouraging to policy makers due to government expenditure on education seemingly being ‘misallocated’. At first sight, the risk of brain drain may appear as a justification for restricting migration. However, ‘brain drain’ usually has positive consequences.
Firstly, theoretically speaking, there will be incentives to invest in education and training. This is because brain drain leads to a fall in the average level of human capital. In order to maintain or improve the productivity levels within the economy, there is a requirement to maintain or improve the level of skill and qualification in the economy. Thus, ideally inducing additional government investments in education (brain gain). Overall, the weighing up of the positive effects of brain drain (which will be discussed in a later post) and the positive effects of the brain gain will determine whether or not there is an improvement in social welfare and growth.
Secondly, remittances (the act of sending money back home) are able to lower poverty rates as the direct payment to individuals and families raises household incomes and enables them to meet their own needs. Consequently, the increase in consumption due to greater spending power will lead to an increase in the aggregate demand in the economy, thereby encouraging economic growth.
Thirdly, upon their return, emigrants will be able to contribute to higher productivity as a result of their schooling or working abroad where it is hoped that they would have accumulated human and financial capital. These individuals will innovate by transferring knowledge and skills gained abroad into the Nigerian economy. Fresh ideas and talent will act as a driving force for economic growth as information gaps are bridged and technologies are adopted. This coupled with financial investment as a result of wealth built abroad will have a positive impact on the Nigerian economy.
The analysis within this post has been primarily theoretical, so what is actually happening? Is Nigeria seeing the benefits of sending students abroad, or has it been detrimental to the Nigerian economy? I will be discussing this in future posts.
Writer: Alexandra Akpabio