CBN, banks suspend forex allocation for school fees, medical bills

The Central Bank of Nigeria and Deposit Money Banks have resolved to suspend further allocation of forex for the purpose of school fees and medical bills overseas.
The decision was reached in Abuja on Thursday at the Bankers’ Committee meeting.
The Committee said foreign exchange allocation for medical bills and school fees constituted 15 per cent of foreign exchange demands in the country.
The Director of Banking Supervision of the CBN, Tokunbo Martins, said though the decision was painful, it must be implemented to save the country.
Martins said rather than grant foreign exchange for medicals and school fees, banks had resolved that the bulk of foreign exchange demands should be for the development of the real sector.
She said it was a sacrifice Nigerians would have to go through in the short term in order to achieve a long term development for the economy.
She said: “You know it is something that affects all of us and I think that the watchword is belt-tightening.
“It is the pain we may need to go through today.
“Short term.
“So that there will be long term development in the country whether it is infrastructure, manufacturing, etc.
“So, the question is how we can prevent or reduce the crowding out of the real sector where there is increase in demand on the invisible.
“So, it is something that CBN is looking at and it is something the Bankers’ Committee is looking at.
“If you think about it, the pressure on forex now – from school fees abroad – is significant.
“At what point should we begin to look inwards?
“The pressure on medicals is significant.
“At what point should we begin to look inwards?
“As Nigerians, we also need to be patriotic in terms of our sentiments.
“We need to think about what do I have to sacrifice today for the long term benefit of our country and the economy?”
The Managing Director of Access Bank, Herbert Nwigwe, who also spoke after the meeting, said a decision has been reached to channel foreign exchange to the real sector because those demands tend to crowd out demands to import raw materials and to support industries.
Nwigwe said: “The problem with that is the fact that it tends to crowd out the critical foreign exchange that should be used in the real sector to import raw materials, to support industries, to encourage employment.
“So, there is a question around how far we are going to allow this to continue.
“Shouldn’t we redirect these resources towards the real sector as we should?”