Dollar scarcity: Parents groan as banks delay foreign school fees payments

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The lingering foreign exchange scarcity in the country is taking a heavy toll on foreign tuition payment, as many parents and guardians groan over difficulty in paying their children’s school fees, Saturday PUNCH findings have revealed.

Last year’s outbreak of the COVID-19 pandemic and the subsequent crash in oil global prices threw into chaos the economies of many foreign exchange-dependent countries like Nigeria.

While the Central Bank of Nigeria has managed the allocation of forex to banks for the payment of school fees and other invisible transactions since last August when schools started resuming from the initial global lockdown, the situation has become unbearable for many Nigerian parents in recent months.

Saturday PUNCH investigation revealed that parents are now finding it tough to access forex from banks in good time to pay their children’s school fees abroad, with several dollar requests piling up in banks for weeks.

Payment of school fees overseas through Nigerian banks are expected to be consummated within 24 hours of filling a CBN document called Form A at a commercial bank.

The foreign exchange equivalent of the tuition paid in naira at a Nigerian bank by a parent often gets to the foreign university’s bank account within a day.

However, investigation revealed that while the process had gone from 24 hours to over one week late last year, the lingering dollar scarcity had made the situation worse to the extent that parents now wait for almost one month, with some banks delaying their customers as much as six weeks to two months.

According to some parents who spoke to Saturday PUNCH, banks have often complained of inadequate allocation from the CBN to process the payments, a situation that has made several parents to worry over the risk of paying their children’s school fees very late.

Top sources in banks revealed that there were thousands of forex requests piling up in various banks across the country as parents wait for the banks to process the payments.

Bank officials who spoke to one of our correspondents said those requests would only be processed if the CBN made adequate forex available to banks.

Narrating the plight of the banks, a top executive in charge of foreign exchange payments in a Tier-2 bank who chose to speak on condition of anonymity because he was not authorised to speak on the matter said, “Shortly after the lockdown that started in March, the CBN suspended forex allocation because activities were no longer going on.

“Schools had closed, people were no longer travelling and most factories were shut. But around August last year when schools abroad started opening and other activities began to pick up in Nigeria and overseas, the CBN resumed allocation to banks.

“However, the CBN was no longer giving us the amount of dollars they used to give us as a bank. For example, my bank’s allocation was reduced by about 50 to 60 per cent. I don’t know of other banks. So, around November and December, we started experiencing the forex scarcity more and we had no choice but to delay forex requests. But it has become worse since the beginning of this year.”

Parents narrate ordeal

A parent, Mrs Foluso Olorundara, who is a top civil servant, said her bank failed to process for over one month her foreign exchange request meant for the payment of the tuition of her daughter who is in a medical school in Dominica, a situation that forced her to move to another bank which later processed it through the assistance of a top executive.

Narrating her ordeal, she said, “I made a request for forex to pay about $7,000 tuition for my daughter who is in Year 6 in a medical school. I filled the Form A at the Lokoja branch of Access Bank Plc.

“For over one month, the bank could not process the request; they said there was a long queue and that it was not yet my turn. My daughter’s medical rotation was due and she needed to register for the next one and the deadline was almost expiring. I became worried and frustrated to the point that I had to start calling the people I know. Eventually, a brother in Lagos spoke to a top executive of another bank who eventually assisted through his bank after one week.”

Olorundara wondered why she would labour to get money and still needed to be subjected to enormous stress to get her daughter’s school fees paid.

She added, “I approached other banks including First Bank Plc and Guaranty Trust Bank Plc. They told me there was a queue and I needed to join the queue and that it would take weeks or about a month. Other options that came were parallel market rate but I could not afford them.”

Another parent, Mrs Maria Adigun, whose son is studying in a Turkish university, said she had also been experiencing what she described as “unimaginable pain” to pay her child’s school fees, which had to be done in dollars.

Adigun, a widow, said her son who is in his third year, was also finding it difficult to pay his rents due to the same difficulty on how to procure the dollars.

She told one of our correspondents that the struggle to pay the 2021 school fees of her son was “excruciating”, but thanked an unnamed army officer who she said helped her to facilitate the process.

She said, “I had put in my application for the purchase of the dollars about three months ago, specifically early January, by depositing enough naira in my account. I was asked to keep checking with them in order to know when it would be my turn since the bank claimed that there were some people in the queue before me.

“I kept checking, almost every three days since January 5, 2021, but up till March 7, there was no success. There was a day I wept openly in the banking hall because the calls I was getting from my son was affecting me psychologically.

“I would not have dabbled into sending him abroad if it were to be now, but that was what his father wanted while he was alive. Unfortunately, he died a year after my son, Ibidapo, resumed his academic programme abroad. I did not want to dampen his morale, so I had to continue paying. Now, he has two years to go. I know God who has been doing it will see me through. I wish I could transfer his schooling to Nigeria.”

Another parent, Mr Tunde Akinsola, who is an Ibadan-based civil engineer, said due to the forex problem, he almost ran into trouble earlier in the year over the delay in the payment of the tuition fees of his son, who is studying in Ukraine.

According to him, it took the intervention of a top government official to get his bank to fast-track the processing of the Form A.

He said, “There was almost trouble early this year when the payment of my son’s school fees in Ukraine was delayed by the bank. It took the intervention of a top government official in the country to get the bank to fast-track it. We almost didn’t meet up with the deadline.”

Another parent, Mr Oluyemi Adeyemi, who has a child studying medicine in one of the universities in Ukraine, said he had been encountering difficulties paying his child’s school fees in dollars.

According to him, the delay being encountered in the banks forced him to approach the black market.

Adeyemi said, “It is frustrating to pay school fees in dollars when you are not going through the banks. What I do is to buy dollars at the black market at a very exorbitant rate to pay his school fees.

“My requests to banks have always met brick walls. Initially, Western Union was reliable but it later suffered a similar bottleneck. It is a serious matter.”

Mr Kelly Osarodion, a guardian who is responsible for the payment of his sister’s school fees abroad also recounted his experience.

According to him, paying school fees for students abroad has been a herculean task due to the difficulty in accessing forex and the delay that is often associated with it.

He said, “Sending dollars out of Nigeria has been a very difficult thing, while going to the bank here to send the money is trouble, and getting someone to withdraw it abroad is also another problem.

“Before now, I used banks in Nigeria but you buy dollars from the bank with naira at a very high rate now because the official rate is also going up. I even tried the option of telling my sister who is schooling abroad to use her MasterCard issued in Nigeria abroad but the problem didn’t get solved either. It is still expensive because of the charges by Nigerian banks.”

Osarodion explained that the development forced him to explore the option of Bitcoin. This, he said, had saved him from a lot of stress.

He said, “I eventually resulted in using Bitcoin to pay school fees. So far, it has been the best decision I made with regards to paying my sibling’s school fees abroad. We both use the Bitcoin platform, so whenever it is time for her fees to be paid, I simply transfer my coins to her and she sells them. After selling, she uses the money to pay her fees.”

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An Oyo State-based businessman, Mr Sunday Ogunniran, also said he was forced to buy forex from the parallel market which he later sent abroad through his domiciliary account in order to meet the payment deadline for his son who is schooling in the United States.

According to him, the stress and delay associated with sourcing it from banks via the official market often push him to the parallel market.

He said, “Whenever I need to send the tuition urgently, I often resort to the parallel market. I can’t continue to wait on the banks whenever the payment is urgent. I have two children schooling abroad and most times, I wait for banks when it is convenient to do so.”

Also, a man whose distant relative schools in Ghana, said the pressure of sourcing for the elusive dollar contributed to the untimely death of the student’s father.

He said though the son school is in Ghana, the school fees is paid in dollars. He said, “My brother had what I would call chronic hypertension. He was always going to hospitals to manage the illness. I think the pressure of not getting paid enough from where he worked contributed to his death. Then, ultimately, the pressure of sourcing for dollars for the payment of his son’s school fees contributed. He was overwhelmed. Now, he is dead. I pity the son and his mother who are to continue carrying the burden.”

Meanwhile, a former Chairman of the Peoples Democratic Party in Lagos State, Captain Tunji Shelle (retd.), also told Saturday PUNCH that he experienced challenges obtaining foreign currency ahead of his trip.

He said, “That (foreign currency) is what I have been trying to get. I needed to travel (overseas) and I even went to the bank yesterday (Thursday) to request for foreign currency but they asked me to come back next week.

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“The last time I travelled overseas in March 2020, I couldn’t get anything. That is why I had to give them advance notice this time round. I went there yesterday and they were proving difficult, though they told me they would see what they could do by next week.”

NAPTAN to write memo to Education, Finance ministers

The National President, National Association of Parents, Teachers Association of Nigeria, Haruna Danjuma, said some parents had complained to the association in some states and that the association was set to write a memo to the ministers of Education and Finance to enable them to look into the matter.

This, he said, would enable the government to address the problem with a view to fast-tracking school fees payment overseas.

Danjuma said, “The matter has been brought to our attention in some states. We will write a memo to the Minister of Education and that of Finance so that they can look into the matter and help this set of parents. Education is very important and there is a need to address anything that would affect the children’s education.”

Bankers react

Several of the banks contacted on the development declined comment while some others promised to get back to one of our correspondents who contacted them.

However, they had yet to get back over one week after they were contacted. First Bank Plc, Access Bank Plc, Guaranty Trust Bank Plc and United Bank for Africa Plc who were contacted failed to get back to Saturday PUNCH after one week.

However, some officials of the banks told our correspondent on condition of anonymity that the situation was a reflection of the forex scarcity in the country which was caused by the COVID-19 pandemic and the subsequent crash in oil prices.

A First Bank official said, “We don’t have enough forex as a country and CBN has no choice but to ration what the country has. We can’t afford to deplete our external reserves anyhow. It is part of the dollar stock as a country we need to service our foreign debt which is a bit high now. This is why there is a queue for those who need forex in banks.”

Also, an Access Bank official, who spoke on condition of anonymity because he was not authorised to speak on the matter, said, “We can’t treat all forex requests immediately. There is a queue and backlogs must be cleared before it can get to new applicants. Don’t forget, the length of these queues differ in banks depending on your customer base. This is why there is a delay.”

Also, a staff member of GTBank, who chose to speak off the record, said, “Parents and other people seeking forex have to wait. There is a queue. Don’t forget that we also depend on CBN to get dollars.”

Also, a UBA official said, “The banks work with CBN when it comes to forex. I’m sure you know there is an issue with forex as a result of last year’s outbreak of COVID-19 and the subsequent fall in crude oil prices. But now that the oil prices are going up, things should improve soon.”

The Acting Director of Corporate Affairs, CBN, Mr Osita Nwanisobi promised to get back to our correspondent.

After one week, he told our correspondent that the request for explanation on the reason for the scarcity was still pending with the Trade and Exchange Department of the regulatory authority. He had yet to respond as of the time of filing this report.

Hoarding, international pressure fuelling dollar scarcity –Economists

Notable economists and dons have said the activities of some players hoarding the greenback are fuelling the current dollar scarcity which has also taken a toll on school fees payment overseas.

They also said that increasing pressure by international organisations like the World Bank, International Monetary Fund and the World Trade Organisation on the CBN to devalue the naira was also fuelling speculation against the local currency.

A Professor of Economics, Leo Ukpong, said speculators were hoarding the greenback in anticipation of further crash in naira against the dollar at the official and parallel markets.

This, according to him, is fuelling the current scarcity of forex.

He said, “Part of the reasons parents are experiencing this challenge is that some people are buying dollars and keeping them in anticipation that the CBN will soon devalue the naira. They believe the naira will fall further both at the official and parallel markets very soon. You know that the World Bank, IMF and World Trade Organisation have been putting pressure on the CBN to devalue the naira. This is making people to believe that the naira will fall further. As a result, a lot of people are hoarding the dollar. Imagine you buy the greenback now at around N410 and later you sell at N600 per dollar. This is part of the things creating the imbalance in the system.

“My recommendation is that in the long run, we should reduce our consumption of foreign goods and services. Also, foreign inputs into our manufacturing and construction should be reduced. In the short term, the rise in oil prices may give a little relief but it may not last long.”

Similarly, a former Director-General of the West African Institute for Financial and Economic Management, Professor Akpan Ekpo, said the factors fuelling the scarcity were “mysterious.”

He also explained that beyond the general forex scarcity occasioned by the pandemic, the activities of some unpatriotic players in the system were making the greenback more scarce than necessary.

As a result, the don advised the CBN to devise a means of dealing directly with foreign universities and schools in the payment of schools fees.

He said, “It is sad when parents can’t get forex to pay their children’s school fees overseas. The CBN has said it overtime that it will ensure schools fee and medical bill requests are taken care of. However, some banks prefer to allocate more dollars to importers instead of parents who want to pay school fees. This is part of the reasons the situation is getting worse.

“My advice to the CBN is to devise a means of dealing with foreign universities directly by designating where parents can easily make the payment for school fees.”

Also, a professor of Economics at the Olabisi Onabanjo University, Sherrifdeen Tella, said high import bill and external debt was draining the country’s external reserves.

He said, “There is shortage because the country is servicing and repaying heavily her external debt and paying for imported raw materials.”

By Oyetunji Abioye, Tobi Aworinde, Tope Omogbolagun and Peter Dada

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