In their pursuit of the promised above-average profits, many investors in Nigeria seem to be disregarding the clear “red lights” provided by the promoters, which typically contravene market patterns and suggest probable fraud.
Ponzi schemes are “investment” initiatives that offer unrealistic returns and should be avoided at all costs. The merchants target greedy investors in their efforts to expand their pyramid schemes, which provide returns to their investors from fresh money given to the operators by new investors rather than profit gained via normal means.
The Ponzi scam is named after Italian immigrant Charles Ponzi, whose 1919–1920 deception was celebrated in Boston.
Ponzi schemes have become popular as a result of Nigeria’s rising unemployment and widespread poverty. Successful Ponzi schemes rely on close-knit networks of victims known as “affinity groups” to which the perpetrators of the scam are already attached or may have access. In fact, some individuals achieve rapid development in their businesses, but wealth building is not easy. Its journey is evident to everybody since it does not occur abruptly.
As if that weren’t enough, there’s also the Poyoyo investment scam, which has cost many Akure and Lagos citizens millions of naira. Kunle Adesua, the CEO of the Ponzi scam, is said to have fled with millions of naira from investors, leaving no trace of his location. They were offered a return on investment of 20%, which was low enough to persuade them to part with their hard-earned cash.
The interesting thing about all these bogus schemes that have scammed a lot of Nigerians is that most Nigerians would not even be deterred from investing in another plan. When it seems that everything has calmed down, another scam emerges, and individuals continue to invest without doing a thorough background check.
I don’t want to seem like a harbinger of bad news, but many Nigerians will continue to fall victim to impending Ponzi scams. I also don’t believe the Ponzi scheme activities in Nigeria will be stopped; all that remains is for individuals to be wise and do thorough background checks on anything they wish to spend their money on.
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Echatah Patrick, has over 3 years of experience working in Content curating, communication, journalism and child development.