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Comment by michaelmrose | Hacker News Reader

US aid to Nigeria is 793M

https://explorer.usaid.gov/cd/NGA

Perhaps this should be conditioned on punishing these criminals or just suspended for the next few years

1) US foreign aid generally consists of money earmarked to buy goods from specific cronies in the US for specific elites in the target country. This lagniappe creates influence over those elites that greases other private import/export political/banking schemes between that country and large US firms.

2) That aid is generally also contingent on not taking aid from designated US state enemies like Russia and China, who are often eager to create the same relationship with the target country. Our eternal aid to Egypt, for example, would be happily replaced almost instantly if we withdrew it, along with any Egyptian weapons and infrastructure contracts with US firms.

Foreign aid is not charity.

My uncle works in cybercrime for a city PD. He says people in his city are regularly tricked into sending their life savings via bitcoin ATMs to Nigerian scammers.

Bitcoins, Visa gift cards, gift cards in general

It’s super widespread.

It’s a good idea, but unlikely to move the needle very much. According to the article Nigerians are taking in ~$18B in unemployment scams. This dwarfs the money coming from foreign aid. In a country with rampant corruption the scammers will simply bribe the authorities and continue as normal. The government will respond to international pressure by making a few high profile arrests for publicity, without taking serious measures to stem the problem. Meanwhile the vulnerable systems of state governments will still be vulnerable. Better to just pay the cost of a software upgrade for the first time in 40 years.

If withdrawal of aid isn't sufficient you can use sanctions against the nation in question or even against nations that opt to trade with that nation. It logically wouldn't take much to tip Nigeria into a further clusterfuck.

Chances are the officials don’t want to stem the problem. $18B is a non trivial amount of money to inject into a country like Nigeria with a GDP of $448B (2019). No sane politician is going to purposefully cut off 4% of the GDP, especially when the costs are externalized to another country.

18B? Just how many of persons doing this in Nigeria could there be? I somewhat doubt that the figure can be that high. That is millions of individual cases, which would mean that there is thousands or tens of thousand people involved and even more with processing the money on the way...

Nigeria is the largest country in Africa. The population is ~200M (~60% of the population of the US). 1M people is only 0.5% of the total population of Nigeria, so it is not a stretch to imagine that number of people engaged in cyber-crime. When you consider that Nigeria's population skews young, and the country is filled with a lot of very intelligent, well educated people, who don't have a chance of landing a six figure salary working for a FAANG company, it does not seem unreasonable to expect people to make a living doing something that is not totally ethical (even people with all the opportunities in the world go on to work as corporate consultants).

When the take is 36 Billion, threatening to suspend 793 Million may not really make that big of an impression.

The $36 Billion isn't going to the government of Nigera...

Some of it is.

At 8% of the 2019 GDP, a lot of that $36B is going to eventually make it back into government hands in the form of taxes.

In 2019 the Nigerian government’s budget was 3.4% of the GDP. If that $36B gets taxed like the rest of the economy it’ll raise $1.22B for the government. Even assuming that fraudsters are dodging their taxes at a higher rate, the tax revenue alone from $36B might outweigh foreign aid for the year.

Also consider the Nigerian government current receives aid money, plus whatever amount they're able to tax from this fraudulent money (which is probably pretty low as you mentioned, fraudsters are unlikely to be on the up-n-up with their taxes, especially when the income came from illicit activities).

So chopping nearly $1 Billion in aid is going to hurt badly, even if the fraud continues as normal.

Nigeria fiscal pressure is 6%. So on average $2bn of that is going to the government. It should also help the local currency exchange rate.

Or just deduct the amount stolen from what we provide. So if it's generally 793M annually we send net $0 for the next 45 years.

Foreign aid is never intended to help the people of a nation. It's used by high-income democratic nations to support autocratic policies and resource extraction.

I doubt very much of that 793M makes it to any of the people pulling these scams. It's typically used as legal bribes for the governments of those countries, who distributed it to all their cronies at the top, in order to maintain power and sell national resources to the US/EU and others at very low prices.

The Dictators Handbook by Mesquita and Smith go into more details on how this works.

That's kind of the point - hold the 'foreign aid' funds from the nation, until said nation does something to combat the fraud.

You can't actively police your laws inside a foreign nation, but with some level of control (i.e. $793M/a in "foreign aid" held over their heads), you can tell the nation what you want them to do about things affecting you. Chances are good they're going to comply.

If we accept the assumption that $36b really is in actual Nigeria based scammers, and the government were able to comply and threatened or started to comply, they could also tax scam income 2.5% for government to have the same funds from this one scam alone. But without taxing scams directly, there are massive trickle down effects that probably amount to more than 2.5% being siphoned off to taxes.

>It's typically used as legal bribes for the governments of those countries, who distributed it to all their cronies at the top

Wouldn't those be exactly the people you need in order to stop these scams?

How is collective punishment the issue? Is cutting off aid for an entire country acceptable because of a few bad actors? If anything, wouldn't cutting off aid just increase the need for wealth transfer? If I'm Nigeria, and I'm scamming to the tune of billions, why do I care about small sums?

When the country in question isn’t taking action against this widespread issue then I’d say it’s acceptable. It’s not just a few bad actors. People are regularly being scammed out of their life savings.

I don't think Nigeria, or many African countries, have the capabilities to enforce justice properly. Both technologically, institutionally and political will. Governments over there are not like governments here. You ask the Nigerian government to round up "internet scammers" and innocent people get targeted, political enemies end up in jail, a few high profile arrests and little happens.

You have a very high opinion of African governments if you think we can send them a list of suspects.

I know it’s different areas and backgrounds, but it would also make sense to start promoting/helping them grow other areas including technology and security.

Technology is an area that would help a ton and services/products can be exported fairly easily.

They clearly have capable people.

The US government isn't great at busting $1B+ thefts either. Look at Enron, the 2008 financial collapse, and Donald Trump's career.

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