How the US Benefits from Foreign Aid to Nigeria

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SEATTLE — Foreign aid is the ultimate investment. It has enormous potential to reap profitable returns for the United States, as well as perpetuating America’s post-World War II strategy of fighting poverty and increasing the number of free and stable democracies worldwide. The U.S. benefits from foreign aid to Nigeria in a number of ways. Foreign aid is rarely, if ever, a gift.

The term foreign aid is really a misnomer because it connotes unrequited charity giving, even though both the donor and the recipient derive immense benefits from aid. In fact, some of the world’s most prosperous and dynamic economies—Singapore, South Korea, Brazil, the United Kingdom, France—were once recipients of U.S. aid.

Approximately 1 percent of the U.S.’s federal budget is designated to aid abroad, hardly a substantial amount considering the potential future trade gains. Slashing the budget for foreign assistance could hurt the United States economically and diplomatically as much as it would halt vital humanitarian aid from reaching the people who need it most.

The Federal Republic of Nigeria’s rapid economic resurgence and unprecedented rate of population growth can be partially attributed to continued American foreign aid and partially to Muhammad Buhari. Elected president in 2015, Buhari’s democratic ideals brought an end to decades of social and political instability and internecine civil wars. His vast military experience meant he was well suited to deal with the issue of violent insurgency in the north. Funding from the U.S. has continued to provide humanitarian assistance in the northeast region of Nigeria, where Boko Haram has been most active.

As well as supporting global peace and security, foreign aid can be seen as an invaluable investment in needy countries that have the potential to become future trade partners with the United States. South Korea, dubbed by USAID as a “textbook example of aid recipient turned donor”, transformed from a poverty-ridden nation heavily reliant on USAID’s assistance to an independent donor of financial and humanitarian aid worldwide. Nigeria, too, has the potential to join a distinguished list of nations that have gradually transitioned from aid recipients to eventual donors of humanitarian assistance.

Dispelling the notion that countries receiving foreign aid are subject to a vicious and perpetual cycle of dependency, Nigeria, Africa’s most populous country, is on its way to becoming one of the world’s leading economic powerhouses and is expected to overtake the United States as the third most populous country in the world by 2050, according to a 2017 U.N. report.

With a current population of 187 million, this figure is expected to mushroom to 300 million in the next 30 years. The U.N report also showed that over half of the projected global population growth over the next half-century will take place in Africa. Along with Uganda, Tanzania, Egypt, Ethiopia and the Democratic Republic of Congo, Nigeria will be one of the biggest contributors to this population growth. A population boom, twinned with positive economic development, presents the United States with valuable trade, manufacturing and industrial opportunities.

There are many compelling U.S. benefits from foreign aid to Nigeria and other countries. Investing in the future of Nigeria will also enhance the U.S.’s business prospects in the region, and will open America up to a vast network of customers and clients. The continent’s untapped market offers a world of commercial opportunities for exporters and manufacturers and helps connect American businesses with new consumers and suppliers.

Nations receiving U.S. economic, humanitarian and security assistance also make better trading partners and better allies. Bill Gates wrote in a 2017 blog about the benefits of conducting business in places that were once on the receiving aid of U.S. aid. “Microsoft’s experience in Japan is part of a larger trend that’s still going on today, as more countries join the ranks of the middle class,” Gates noted. “Countless U.S. companies are doing business in places that used to get American aid but have become self-sufficient, including South Korea, Brazil, Mexico, Vietnam and Thailand.”

The U.S. benefits from foreign aid to Nigeria because financial assistance programs enable Africa’s most populous country to fulfill its commercial potential as one of the largest oil producers on the continent. As Africa’s largest economy, the United States has shown ample interest developing the country’s non-oil economy, too. In 2014, for example, President Obama announced that the United States government will invest $7 billion in business opportunities and exports in Africa; U.S. companies would invest an additional $14 billion in deals in the banking, clean energy, IT and construction sectors. As further evidence that Africa is no longer in America’s blind spot, a 2014 report said that General Electric will “pump $2 billion into Africa by 2018 to develop the facilities and skills training it will need to land more infrastructure and energy contracts there.”

Foreign aid by the United States is critical in preventing epidemics from spreading worldwide. Funding helps strengthen health systems across the world so that they will be better equipped to anticipate, identify and contain diseases before they spread. It is no coincidence that the countries most badly affected by the Ebola outbreak, Sierra Leone, Guinea and Liberia, had very poor health systems.

Had health workers stationed in Nigeria not been adequately equipped to contain the Ebola epidemic, and allowed it to spread throughout international cities like Lagos and Abuja, the epidemic could have spread throughout Europe, the Americas and Asia and claimed hundreds of thousands—if not millions— of lives. Foreign aid helped prevent this catastrophe from ever happening.

Aid is a powerful tool designed to eventually end aid. As John F. Kennedy said in 1961, the U.S. government’s approach to foreign aid should be to help people help themselves. Nigeria’s economy, benefiting immensely from American financial and humanitarian assistance, is showing promising signs of lasting growth, prosperity and self-dependency. If that is not enough, the U.S. benefits from foreign aid to Nigeria because it helps build a solid foundation for future commercial ties, allowing the United States to invest in uncharted territory.

– Johnny Harounoff

Photo: Flickr

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