Tracy had worked with a financial consulting institution for close to fifteen years and thought it right to resign and establish a merchandise business. She had made some savings while putting plans together to raise more capital for the business. At this point, every one of her thoughts was geared towards the goal, and so every idea of raising money became a potential source of capital to actualize her dream.
Her introduction to the Mavrodi Mundial Moneybox (MMM) scheme appeared to be a brilliant idea to get quick money. With only a few questions asked and a few answers provided, Tracy did not hesitate to plunge all her savings, severance pay, and a loan into the scheme. The expected outcome was huge, and her dream of raising enough capital seemed to be turning into reality. A week later, she woke up to the news that MMM had shut down. She not only lost her savings and severance pay; she also went into debt, and her dream of setting up her own business was ruined.
What Nigerians Have Lost to Ponzi Schemes
Millions of Nigerians were hard hit by the collapse of the MMM scheme, just like those that came before it and after it. Many Nigerians developed health complications, while others died following the collapse of such schemes. The most striking aspect is that even the learned were scammed just like the unlearned; the rich were swindled just like the poor. No category of persons was spared.
After the catastrophe of MMM, nobody expected patronage of another ponzi scheme, as it was assumed that serious lessons had been learned. Surprisingly, the next schemes – BitFinance Global and CBEX – swallowed Nigerians’ investments running into billions of naira. They were advertised as artificial intelligence–powered cryptocurrency trading platforms that allowed users to buy and sell digital assets, with promises of “100 per cent returns every month.”
Nigerian victims lost an estimated ₦18 billion to MMM in 2016 and ₦213 billion to MBA Forex. It is estimated that Nigerians – cutting across all walks of life – have lost close to a trillion naira to Ponzi schemes over the years. No one knows what the next one will be, but one thing is certain: Nigerians will fall victim again when it eventually launches. More surprisingly, victims of the last scheme will opt into the next one.
Why Can’t Nigerians Resist Ponzi Schemes?
It is striking that warnings and lessons have not been able to dissuade Nigerians from these schemes. Are Nigerians truly foolish? No, they are not. They are simply afraid and, at the same time, greedy.
There is a deep fear in the average Nigerian. For the poor, it is the fear of survival – uncertainty about the source of funds for the next meal, education expenses, and medical bills. The rich, on the other hand, are unsure of how long they can sustain their financial status. This deep-seated trepidation silences common sense and natural caution, gravitating instead toward greed. Nigerians are quick to seize any opportunity to cash out. The mental restraint to ask “why” and “how” simply evaporates in the face of juicy – not only promised but seemingly evident – returns. The tendency to equate pressing financial needs with glaringly high returns is very strong, blinding victims to even more glaring risks.
Let us take a closer look at the two major reasons stated above – fear and greed which stem from four key factors. Nigerians fall prey to Ponzi schemes because the Nigerian system is harsh, hope is scarce, trust is misplaced, and the need to escape poverty is urgent.
The system is harsh: Nigeria’s economic environment places heavy pressure on ordinary people. Poor and inconsistent economic policies, rising prices of commodities, unstable income, poor infrastructure, and limited access to credit make honest wealth-building slow and frustrating. Many work hard yet remain stuck, making shortcuts not only reasonable but appealing.
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Hope is dampened: When education no longer guarantees employment and years of effort do not translate into progress, optimism fades. People begin to doubt that patience and discipline will ever pay off, making promises of fast returns emotionally attractive.
Trust is misplaced: Long-standing failures of banks, government programs, and public institutions push people to rely on personal networks, religious leaders, or familiar faces. This social trust, though well-intentioned, is often transferred to fraudulent schemes without proper scrutiny.
The need to escape poverty is urgent: Poverty in Nigeria is not abstract – it is real, immediate, and daily. School fees, rent, healthcare, and family responsibilities create constant pressure. In such conditions, the fear of missing a rare opportunity can outweigh the fear of losing money.
Low Financial Literacy and High Informal Education: Many Nigerians are highly intelligent and street-smart, yet many lack basic investment knowledge such as compound interest, risk versus return, and why guaranteed high returns are impossible.
A Pattern That Appeals
Ponzi schemes are, no doubt, carefully packaged to be appealing and convincing. The pattern dates back to Charles Ponzi, an Italian-born swindler who operated in the United States in the early 20th century. In 1920, Ponzi promised investors massive profits from arbitrage in international postal reply coupons. While he paid early investors returns, these were funded using money from later investors. His operation eventually collapsed, costing investors an estimated $20 million.
The same pattern persists today: promises of high and irresistible returns with low risk—sometimes as high as 100 per cent, payments to early investors as proof of legitimacy, and heavy publicity using notable faces. These schemes are usually unregistered and unregulated.
These principles will remain appealing unless Nigerians learn to keep their anxiety and appetite in check. Otherwise, future schemes will continue to attract even higher patronage, with more devastating outcomes.
