The Group Managing Director, UAC Plc, Mr. Larry Ettah, has urged the Central Bank of Nigeria and Deposit Money Banks to stop allocating scarce foreign exchange for the payment of school fees and medical bills.
He advised the CBN to focus its forex allocation on the real sector of the economy, adding that this will accelerate economic growth and development of the development.
Ettah spoke on the heels of the Bankers Committee’s plan to suspend forex allocation for the payment of medical bills, school fees and other invisibles, which have been estimated at 15 per cent of the total forex demand in the country.
Ettah explained that the pressure on demand for forex had been increased through the funding of “private elite choices” with high allocations to invisibles such as school fees, Personal Travel Allowance, Business Travel Allowance and medicals to the detriment of the real sector like agriculture, industry, building and construction.
He said, “Forex should ideally be targeted at the real sector that has significant local economic linkages, particularly with a view to reviving the nation’s dying productive sectors and the spin-off in terms of employment generation.”
The UAC CEO observed that recent statistics released by the CBN showed that Nigeria’s productive sub-sectors accounted for 93.67 per cent of the country’s Gross Domestic Product in 2000 and that this contribution had steadily declined to 76.21 per cent and 70.71 per cent in 2010 and 2013, respectively.
He described as unwholesome a situation in which an estimated N155bn was spent per annum in the past to educate Nigerian children in Ghana at a time when about N122bn was spent in funding all federal universities.
He added, “The existing high forex allocation to invisibles is clearly an elite privilege that Nigeria cannot afford now or need do. The choice of sending our children/wards to institutions overseas and embarking on sometimes dubious pleasures of foreign travels for holidays are private decisions with its attendant cost that should not be subsidised by the commonwealth.”