A short history of Ponzi Schemes in Nigeria

If you are a Nigerian, chances are you have heard of or even participated in a Ponzi scheme at some point in your life. A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the operators. Sounds too good to be true, right? Well, that's because it is.

Ponzi schemes have been around for a long time, but they gained popularity in Nigeria in the late 2000s and early 2010s, when the country was hit by a series of economic and political crises. Many Nigerians were looking for quick and easy ways to make money, and Ponzi schemes seemed to offer just that. Some of the most notorious Ponzi schemes in Nigeria include:

- MMM: This was the mother of all Ponzi schemes in Nigeria. It was founded by a Russian named Sergey Mavrodi, who claimed to have created a mutual aid network that would provide its members with 30% returns per month. MMM attracted millions of Nigerians who invested their savings, pensions, and even borrowed money to join the scheme. At its peak, MMM was estimated to have over 3 million members and billions of naira in circulation. However, in December 2016, MMM announced that it was freezing all payments due to "system overload" and asked its members to be patient. Many Nigerians never saw their money again.

- Loom: This was another Ponzi scheme that went viral in Nigeria in 2019. It was based on a simple concept: you pay a certain amount of money to join a group of eight people, and when the group is full, you get eight times your money back. The catch was that you had to recruit new members to join the group and fill up the slots. Loom promised its members up to 800% returns in a matter of days or weeks. However, as more people joined the scheme, it became harder to find new recruits, and eventually the system collapsed.

- Pennywise Wealth Management: This was a Ponzi scheme that targeted young and educated Nigerians who were interested in investing in forex trading. Pennywise claimed to be a registered company that offered its clients up to 2% daily returns on their investments. It also claimed to have a team of professional traders who used sophisticated software and algorithms to trade on the forex market. However, in February 2021, Pennywise suddenly shut down its website and social media accounts, leaving its clients stranded and confused.

These are just some examples of the many Ponzi schemes that have plagued Nigeria over the years. The sad reality is that many Nigerians still fall prey to these scams, despite the warnings and awareness campaigns by the government and other stakeholders. The allure of easy money is hard to resist, especially in a country where poverty and unemployment are rampant.

However, before you decide to join any Ponzi scheme, remember this: there is no such thing as free money. If something sounds too good to be true, it probably is. Ponzi schemes are illegal and unethical, and they only benefit the operators at the expense of the investors. You are better off saving your money or investing it in legitimate and sustainable ventures that will give you real value and returns.

Don't be fooled by Ponzi schemes. They are not worth it.

Grace to You!