The Impact of Currency Fluctuations on African Students Studying Abroad

African students are pursuing higher education overseas in record numbers. However, over the past few years, steep currency depreciation has dramatically increased the cost of studying abroad for these students.

This article examines how currency fluctuations impact African students’ finances, shares real examples of challenges faced, and offers insights for universities and fintech partners to support students in navigating these economic headwinds.

African Student Mobility Amid Currency Volatility

The flow of students from Africa to Western universities is growing, even as financial pressures mount. In the UK alone, Nigerian enrollment more than doubled to 44,195 students in 2021/22​, making Nigeria one of the top sending countries. The US and Canada have also seen a surge: Nigeria sent about 17,640 students to American universities in 2022/23​, and over 21,000 to Canadian institutions in 2022​. Ghana, while smaller in absolute numbers, is rising fast – Canadian enrolments from Ghana jumped 88% in 2022 to reach 3,745 students​, and the US hosted 6,470 Ghanaian students in 2022/23 (an all-time high)​

Naira and Cedi Depreciation: A Financial Storm

However, this boom in student numbers coincides with economic turbulence back home. Many of these students come from economies suffering high inflation and weakening currencies. In mid-2023, the Central Bank of Nigeria moved to unify exchange rates, causing the Naira’s official value to drop by about 40% almost overnight​. By early 2024, after further policy changes, the Naira had slid roughly 60% against the US dollar within a few months​.

One Nigerian student described the situation bluntly: “Within the space of four or five months, the exchange rate has jumped over 300%. Our savings are not going to add up anymore”​. Ghana’s currency has faced similar pressures. The Ghanaian Cedi was one of the world’s fastest-declining currencies in 2022, losing over 55% of its value against the dollar that year​.

Impact on Tuition Payments and Living Expenses

Currency fluctuations hit hardest in two areas.

Tuition payments

When an African currency depreciates, tuition fees denominated in dollars, pounds, or Canadian dollars soar in local currency terms. Students and their sponsors (often parents or relatives) can find themselves suddenly unable to cover installments that were within reach just months before.

Day-to-day living expenses

Living expenses are the second pressure point. Tuition is often fixed annually, but rent, food, and utilities must be paid continuously, and they are subject to both exchange rate changes and local inflation. In destination countries like the UK and Canada, inflation has been running high, driving up student living costs.A Ghanaian student in the US or Canada might find that the monthly stipend their family can send – say GH₵2,000 – translates to ever fewer dollars for covering rent due to the cedi’s decline.

Real Challenges: Payment Delays, Unexpected Costs, Lost Opportunities

With banks rationing foreign exchange, tuition transfers that used to take days can now stretch into weeks. In some cases, students have missed hard payment deadlines because their funds were tied up in transit or insufficient due to a sudden devaluation. This is not a rare occurrence: in 2023, a Welsh university briefly withdrew a Nigerian student hours after a deadline (a decision later reversed on appeal)​.

Another challenge has been the erosion or loss of scholarships and sponsorships. Many scholarships from home governments or organizations are denominated in local currency or set at a fixed amount. When that currency plunges, the scholarship may no longer cover the promised portion of tuition.

Nigeria’s government, meanwhile, did not offer widespread scholarships but did provide the “Form A” foreign currency subsidy for education; its removal effectively stripped students of critical financial support, akin to losing a partial scholarship overnight​.

Fintech Solutions: How Platforms Like Vavita Can Help

Forward-thinking fintech solutions focused on simplifying international education payments tackle many pain points caused by currency fluctuations and traditional banking constraints:

• Timely, Hassle-Free Tuition Payments: Solutions like Vavita allows students and families to pay tuition directly from their domestic bank accounts in their local currency​. This means a parent in Lagos or Accra can initiate a payment in Naira or Cedi, and Vavita will handle the currency conversion and remittance to the foreign university.
• Locked-In Exchange Rates and Transparency: A key advantage of fintech platforms is the ability to lock in an exchange rate at the time of transaction. This transparency means students know in advance exactly how much in local currency will be debited.
• Local Currency and Payment Options:  Whether a family uses a mobile money wallet in Ghana or an e-transfer in Nigeria, the platform can accept those funds in local currency. The student thus avoids the black-market currency exchanges or unofficial brokers (with all their risks) that many resorted to in the past.
• Minimizing Costs and Maximizing Value: Fintech platforms can be more affordable than traditional bank wires, which carry hefty fees and unfavorable rates. With lower transaction fees, better exchange rates, and no surprise charges, more of the family’s money goes toward actual tuition instead of being lost in transit.
• Support for Institutions and Counselors: Universities receive funds quicker and with clear references, simplifying their reconciliation process. They also experience fewer cases of non-payment or dropout due to finance.

Recommendations for Universities and Payment Partners

What can universities and payment providers do to better support African (and other emerging market) students in volatile currency environments?

1. Offer Flexible Payment Plans and Deadlines: Introducing installment plans or extended payment deadlines can be a game-changer. Some UK institutions have already begun doing this for Nigerian students. Rather than demanding a full year’s tuition upfront, schools could allow semester-by-semester payments or provide grace periods when a student demonstrates that a currency issue delayed their funds.
2. Adjust Financial Requirements During Crises: Scholarship committees might index award amounts to exchange rates so that a “50% tuition scholarship” remains 50% even if tuition costs balloon in local currency.
3. Partner with Fintech Platforms for Local Currency Payments: Universities and payment partners should collaborate to enable local-currency payment options for students. By integrating with platforms like Vavita, a university can let a student in Ghana pay their fees in Cedi (through a secure fintech channel) and still receive the correct amount in pounds or dollars. Universities could list approved fintech payment methods on their websites.
4. Provide Financial Planning Support and Education: It’s recommended to offer budgeting workshops, currency risk briefings, or one-on-one financial counseling for students from high-volatility regions. Universities (and their agents) should not assume that students have access to sophisticated financial advice.