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Economy Blues: TETFUND to suspend foreign scholarships for 2 years over high Forex rate

*Nigeria’s Tertiary Education Trust Fund laments inability to access Foreign Exchange but days the agency resort to do most scholarship training programmes locally through our experienced, first-generation universities and other specialised universities in the country

Alexander Davis | ConsumerConnect

Against the backdrop of the current volatility in the Foreign Exchange (Forex) market, Mr. Sonny Echono,

Executive Secretary of the Tertiary Education Trust Fund (TETFUND) Tuesday, July 18, 2023, hinted at the planned suspension of foreign scholarships for two years.

Echono disclosed this development at a public hearing organised by an ad-hoc committee of the House of Representatives on the alleged missing N2.3 trillion in TETFUND.

ConsumerConnect learnt Echono stated that consultations with stakeholders are ongoing on the issue.

The Executive Secretary also said the Fund is being owed the sum of N323 by the Federal Government, having borrowed over N371.3 billion out of which it has paid N48 billion.

The Nigerian House of Representatives recently set up the Committee, headed by Hon. Oluwole Oke, to investigate the alleged abuse of N2.3 trillion generated from the Tertiary Education Tax by the Fund from 2011 to 2023.

According to Echono, it is difficult to access foreign exchange from the Central Bank of Nigeria (CBN), though the proceeds of their tax accruals generated on TETFUND’s behalf by the Federal Inland Revenue Service (FIRS) is domiciled in the CBN.

The Fund further stressed the CBN had always insisted that the Agency sourced its own Forex to pay fees for Nigerian  scholars studying abroad.

Appeal for government’s intervention

Echono, therefore, urged the House of Representatives’ adhoc committee to intervene on behalf of TETFUND.

However, Echono disclosed the Fund would resort to local institutions for scholarships training.

“We operate a system where our Forex is being sold on our behalf at an official rate and we apply like anybody else to get it, sometimes it leads to additional cost.

“Currently, as I speak, we are in consultations with all our stakeholders to suspend foreign training for a year or two.

“This is because of the recent exchange rate adjustments, we are unable to continue based on our disbursement guideline.

“The money we allocated in naira cannot cover the dollar requirement for training.

“Those who are currently there, we now need more naira to pay for the Dollar that is required for their annual fees. We are trying to put a hold,” Echono stated.

The Executive Secretary further noted: “Most of our training now will be done locally through our experienced, first-generation universities and other specialised universities based here.

This way we can retain our resources in house and cope with the change of foreign exchange variation.”

Rising cases of abscondence by scholarship beneficiaries

In regard to the increasing cases of Nigerians disappearing into thin air after enjoying the scholarships overseas, he said: “Some of the scholars that have been sponsored unpatriotically, when they go, they enjoy our scholarships, acquire higher degrees, but they refuse to come back. It has become a major crisis.

“We are working with the staff unions for stringent and effective measures to be taken; currently before you are sponsored, you are made to sign a bond.”

Echono also stated: “The scholarship requires that you will come back.

“It is required that you have a guarantor and in many cases the guarantor has suffered undue hardship because when you disappear, we hold the guarantor to pay all the money expended on your behalf but that has not been effective.

“We believe that a system where we work with our embassies and the institutions, we can enforce the repayment for those who insist they will not come back.

“If they don’t, we will declare them ‘persona non grata’.”

TETFUND stated: “We will write to the embassies and they will make it available to those countries and they will not be able to get jobs.

“They will be seen as fugitives of law from their countries.

“We may have to take that hard stand because the numbers are alarming. We just checked about 40 institutions and over 137 absconders and the review is ongoing.”

Echono added: “It is a huge number that we cannot afford and so we will be seeking your support to strengthen some of the existing regulations to ensure that those who benefit from this programme must come back.

“We are not against people looking for greener pastures but do so on your own, not through our scholarship or through our sponsorship.”

On alleged N2.3 trillion missing fund

Speaking on the purported missing of N2.3 trillion in TETFUND, Echono clarified that the allegations were unfounded.

According to him, the actual sum generated from education tax from 2011 to 2022 was N2.476 trillion out of which the Federal Inland Revenue Service (FIRS) retained N99 billion as cost of collection.

The Federal Government had since 2013 borrowed N371.3 billion from the Fund out of which it has paid N48 billion so far.

The Executive Secretary noted: “We do have challenges but these challenges and they have nothing to do with fraud.

“Why are basically issues of governance and I would start by explaining what the challenges are.

“First in absolute terms so we have a clear picture of what we are talking about. From the year 2011 to 2022 total education tax collected by the FIRS as presented to us in their documentations, as confirmed from the statements we received from the Central Bank of Nigeria (CBN) which we have also attached for the Committee to peruse is N 2, 476, 733, 181, 679.75.

“Out of this amount, a total sum of N99 billion were retained by FIRS as cost of collection, leaving a balance of N2.37 trillion. So, the total fund that had hit education pool account at the CBN is N2.3 trillion from 2011 to date

“However, the FG over time in the course of governance and to meet pressing needs has borrowed funds from these accounts.

“The total borrowing is approximately N371.339 billion. These borrowings happened over time and most of the borrowings started in 2013.

“The FG acknowledges that it was borrowing and we have full documentation of this and all the correspondences that accompanied it. Other borrowings since then are being tabulated and given to you.

‘We did secure presidential approval for the refund of this borrowing since 2015 and the FG has been refunding albeit in piecemeal.”

He said: “To date, total borrowing is over N371 billion. But total repayment to this date is about N48 billion.

“Last year N12.8 billion was given to us, this year another N12.89 billion was given to us. They are just paying.”

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