The Cost Of A Foreign University Education In Today’s Nigeria

The Oasis Reporters

December 28, 2020

By Dr. Jekwu Ozoemene

In the last couple of days, I have found myself engaging friends in discussions about our children’s College / University education options.

Just a few years ago, these friends would have fancied themselves part of Nigeria’s emergent middle class, comparable with the middle class of economies such as the US, UK and Canada. Given the decay, atrophy and desiccation that has taken place in Nigeria’s education sector, they would not have hesitated to assure you that their children would be schooling abroad, preferably the US, UK or Canada, jurisdictions where non-residents / foreigners attract University school fees ranging from US$35,000 to US$40,000 per academic session.

Today, most are not so sure anymore.

What changed?

The Pew Research Center (a nonpartisan American think tank based in Washington, D.C) defines the American middle class as those earning between two-thirds and double the median household income. For the US, based on 2017 data, this would be made up of people earning somewhere between US$40,500 and US$122,000 per annum.

Those who earn less than U$39,500 make up the lower-income bracket, while those who earn more than US$118,000 make up the upper-income bracket. And of course, we know that location matters in determining these stratifications, but in this instance, we are comparing someone working and earning in Nigeria, who has assumed or intends to assume non-residents / foreigners education costs.

In a June 5, 2016 post I made on Facebook, I asked “who else believes that we are witnessing the second extinction event of Nigeria’s middle class?” Our current economic reality lucidly answers that question.

A friend of mine who was a Deputy General Manager (DGM) in a bank in Nigeria had a guaranteed take home pay (without bonuses and benefits in kind) of about N33 Million (approximately US$150,000 at an exchange rate of N205) per annum in 2015. Going by Pew’s classification, this places my friend on the upper income families’ bracket of the middle class, a very big boy by Nigerian standards. If he managed his expenses prudently and places a premium on quality education, he should have been able to afford to send at least one, or even two of his children abroad to study at US$40,000 each per academic session.

By 2020, that same salary can only fetch my friend US$70,000 per annum (at N460 exchange rate), a shortfall of US$80,000, being the exact school fees for two children in one of such referenced Universities. In fact, to match his 2015 earning capacity, his employer would have to increase his salary from N33 Million to approximately N70 Million per annum.

Same applies to another friend who is a Senior Manager with a bank. In 2015 her guaranteed take home pay (without bonuses and benefits in kind) was about N18 Million (approximately US$88,000 at an exchange rate of N205). Going by Pew’s classification, this placed my friend in the middle class and if she managed her expenses prudently, should have been able to afford to send at least one of her children abroad to study at US$40,000 per academic session.

On that salary today, this Senior Manager has crashed from Middle Income to Lower Income following Pew’s stratification. To match her 2015 earning capacity, her employer would have to increase her salary from N18 Million to approximately N40.1 Million per annum.

So, are we facing another mass extinction event of Nigeria’s middle class and if so, why should we be worried?

A healthy economy depends on a growing and stable middle class, they are the drivers of entrepreneurship and innovation. Most striving and stable economies are those that have continuously grown their middle class. This middle class increases consumer spending, which in turn attracts Foreign Direct Investment as well as Domestic Investment., creating jobs.

Consequently, when the middle class is destroyed, the economy struggles, businesses suffer, workers are laid off, unemployment increases, opportunities disappear and those who fall into poverty find it impossible to lift themselves out.

This is what has been happening in Nigeria over the last 5 years. The purchasing power of the few who had earlier managed to escape poverty has been decimated and most of them dragged back into a vortex of penury.

Our current reality is that what was Nigeria’s emergent middle class has shrunk drastically and is now on the verge of extinction. Poverty has been democratized, normalized, celebrated and even beatified in some quarters.

The middle class tend to value quality education so a growing middle class is a major driver for education. A shrinking middle class has the opposite effect.

But when quality education is not readily available in-country, those who can afford it resorted to sending their children to Universities abroad, despite its significant impact on their earnings.

Even that option is fast disappearing as it has become unaffordable for most.

And don’t be deceived by their official status Corolla, Prado Land Cruiser or even Range Rover Sports, sending their children abroad to study is now a luxury very few Nigerians in paid employment can afford. It is now almost the exclusive preserve of our politicians and successful entrepreneurs.

At the end of the 2020/21 academic session, save for those whose children are on full scholarships, a lot of Nigerian families who are earning Naira in Nigeria and paying school fees in FX for their children in the US, UK or Canadian Universities will have emergency family meetings.

Difficult decisions on education will be taken.

Maybe we all will be forced to demand an improved local education system when we can no longer afford to send our children abroad to study.

Or maybe not.

After all, our leaders and politicians’ can still afford to send their children abroad to study.

Dr. Jekwu Ozoemene was former Deputy Managing Director, Access Bank (Rwanda) Ltd and later Managing Director, Access Bank (Zambia)

Greg Abolo

Blogger at The Oasis Reporters.

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