NewsExpress banner First Bank Fashion Souk Fidelity bank card banner Umm Sulaim's Thoughts Camano banner

Another Ponzi scheme berths in Nigeria, By Tony Ademiluyi

By News Express on 10/07/2019

Gmail icon

Views: 1,935

Charles Ponzi was an Italian-American who was fascinated by life in the United States when he first arrived. He was taken in by the American dream and vowed within himself to be part of the wonderful way of life.

The 1920s proved to be the ripe time for him to strike. This was before the Great Depression when Americans relished quick wealth with the purchases of stocks. He promised his “clients” 50 per cent profit if they kept their money with him for 45 days, or 100 per cent profit if they kept their money for 90 days. He had no known business model to multiply the funds. He was more or less robbing Peter to pay Paul. The funds from new investors were used to pay the older ones. As long as the greedy investors had funds to part with, the music in the party kept playing on with word spreading around like wild fire about the novel money-making scheme. Just as insightful analysts warned, the bust happened with millions of investors having their fingers burnt. The smart Ponzi fled with his new-found wealth before ending up behind bars. His greatest “legacy” is that Ponzi schemes were named after him, to ensure his “immortality.”

When Sergey Mavrodi’s MMM scheme came to Nigeria in early 2016, it found lots of die-hard apostles, as the economic policies were biting harder on Nigerians. It was too good to be true, as returns of 50 per cent ensured that “brave investors” stayed afloat. It was so popular that a song was composed in its honour. The most lucrative job at the time was to become a guider: They made tons of money by “guiding” the people under them in the pyramid box and made a fortune doing next to nothing other than just sweet-talking potential customers.

Then came the great bust in December 2016 when it was suspended with the promise to reopen in January 2017. That promise was never fulfilled. And billions of naira disappeared without trace, as they had no physical office in the country. The death of the founder last year put paid the hopes of any funds recovery, because there was an announcement that the scheme had died with the founder as there were no worthy successors to carry on his “legacy.”

The announcement of the latest Ponzi scheme in town - Loom Nigeria – and the enthusiasm with which it is being promoted shows that Nigerians never learn from history. The promises are so mouth-watering: an investment as low as between N1,000 to N13,000 with eight times return in only 48 hours. Wow! That’s too good to be true! Will we ever learn?

Loom Nigeria has no physical office and known promoters, unlike the defunct MMM. They have no known business model or even a functional website: they operate in closed groups on Facebook and Whatsapp. We remember the wonder banks and how their crash led to victims’ untold hardship. The wonder banks have resurfaced with the Ponzi schemes, being spread by the power of the new media and internet.

The reason why Ponzi schemes thrive in the country is due to the failed state that Nigeria, with so much potential and promise, has been reduced to. Things have never been this terrible: company closures, massive job losses, harsh operating environment for businesses, suicides taken a new dimension in a country once ranked as the happiest in the world. It’s no surprise that hunger has induced us to a state of collective amnesia that makes Nigerians rush like pigs to the slaughter at every Ponzi scheme that comes our way.

The Securities and Exchange Commission (SEC) has issued a stern warning against the participation in such schemes. While we commend this, the warning is weak because, a hungry man is an angry man. The biting fangs of hunger makes a man take leave of his reasoning faculties. You can’t force Nigerians to comply with the warnings when their daily lives are plagued with needless sufferings and avoidable hardships.

President Muhammadu Buhari’s government should be ashamed of the proliferation of Ponzi schemes. It is a sign that the ship has sunk beyond rescue. While we commend SEC for putting out the warning, the government should take it as a challenge to come up with sound economic policies that will make the creation of jobs take the centre stage. Nigeria needs heavy industrialisation to get back on track. At this level, we should be talking of running a 24-hour economy powered by 24-hour electricity supply, and not consoling Nigerians with the asinine excuses of snakes being found in the Kainji dam.

The Esama of Benin, Chief Gabriel Osawaru Igbinedion, once said that his son, the then governor of Edo State, Chief Lucky Nosakhare Igbinedion, should be given a second term even if he failed in his first term since, if a student fails a course in the university he will be asked to carry over or retake the course. It is tragic that Buhari got a second term despite the overwhelming failures, especially in the economy, witnessed in his first term. How sad! 

Despite the economic hardship, we should be thick-skinned to resist quick fixes, which these Ponzi schemes are full of. Adolf Hitler was once quoted to have said that pain sharpens the brain. Let this present hardship sharpen our brain to come up with creative solutions to survive or even thrive in our clime, rather than seek salvation in schemes that will further impoverish them. We are naturally resilient, as some Nigerians have proven to the world that we can make it anywhere, if the climate is right. The never-say-die spirit, especially of our brothers in the East - who thrive as businessmen under the worst conditions known to man – is a testimony to our collective bravery. We should use the same energy to avoid all sorts of Ponzi schemes, as they do nothing but breed greed and laziness in us. The anxiety of not knowing when the party will end does nothing but rub you of your much cherished peace of mind, and even the priceless commodity called sleep. Participation in it is not worth the stress at all. One can’t build anything tangible or substantial on its back.

Nigerians should do all they can within their powers to resist any form of Ponzi schemes. Instead, they should channel their energies towards productive ventures, despite the daunting challenges. We should be visionary in leaving something behind for the next generation to enjoy: Ponzi schemes are never designed that way.

The lure of it should be spat out.


•Tony Ademiluyi writes from Lagos. 


Source News Express

Posted 10/07/2019 05:23:16 AM





You may also like...
Yoruba to decide winner of 2019 presidential election...

Death toll in Boko Haram attack hits 161...

World Bank warns Nigerians against fraudulent cooperative scheme...

Buhari’s second term declaration a nullity — HURIWA...

Ajibola Ogunsola, Femi Adesina lead launch of ‘Voices...

Tambuwal pledges to assist Nigerian Army

Scrapping of courses: No student will be sacked,...

FG hands over Mineral Buying Centre to Ebonyi...

Boko Haram strengthens ties with Islamic State international...

FIFA Exec C’ttee suggests 12 years for president...

Is Buhari born again?

Top judge accuses Amaechi, Umana Umana of bribery...


Latest News Hunters overpower, arrest 2 kidnappers Catholic priests abducted in Ondo DSS invasion: What AGF, NBA must do, by SANs Poll violence: PDP members allege Ekiti Speaker behind shooting in Ikere Sowore: DSS refutes court drama Sowore faked his court arrest ― Buhari’s aide Fraud: Igbo group hails 12-year imprisonment for ex-Governor Orji Kalu ThrowBack: How states spent N37.367bn on pensions of 47 ex-governors, deputies PDP Women Leader set ablaze in Kogi buried amid tears + PHOTOS My saddest day was when I lost 5 players in plane crash ― Iwuanyanwu We are with Igbo, Yoruba, others on restructuring ― Southern Kaduna 981 Kogi teachers write professional exam


Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (569,749 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (455,681 views) Shameless Genevieve Nnaji exposes breasts in public (405,498 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (340,490 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (307,019 views) 10 cars more expensive than Jets (290,828 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (260,846 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (259,700 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (241,142 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (227,701 views) Lagos plane crash: Journalist releases victims’ names (203,510 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (199,985 views)


CBN milk production

CBN banner advert

UBA Wise Savers Promo


Categories Advertorials (3) African Press Organisation (81) Art & Literature (111) Business & Economy (4,615) Business Verdict (89) Columnists (1,156) Complaints & Requests (97) Enterprise & Opportunities (221) Entertainment (716) Features (852) Global Business Monitor (497) ICT Monitor (72) International (4,307) Interview (219) Live Commentary (30) Love Matters (177) Maggie's Blog (510) News (54,954) Opinion (1,436) Pidgin (18) Politics (11,857) Religion (1,132) Sports (2,248) Stock Watch (40) AMA & Al Jazeera Global Update







APO Group Partner




GOCOP Accredited Member

GOCOP Accredited member



Africa Media Agency and Al Jazeera