A Socio-Historical Perspective on Ponzi Schemes and Development in Nigeria: The Role of the Christian Church

Abstract

This paper is a study on Ponzi schemes, development and the Christian church in Nigeria. It traced the emergence of Ponzi schemes in Nigeria. The paper considered the practices of Mavrodi Mondial Movement (MMM), being one of the strongest Ponzi schemes in Nigeria. It assessed the impact of this Ponzi scheme on development in the country. It also looked into the role played by the Christian Church during the period of the scheme’s existence in the country. The paper, however concluded that, despite the people involved in the scheme being interested in supposedly helping people (including those in the scheme and the less privileged), it is contrary to the ethos of Christianity that touches on labour and its corresponding success. The data collected for the study were analysed using socio-historical approach.

Ponzi Schemes as Africa's Twenty-First-Century Shylocks: Complicities in Femi Osofisan's Love's Unlike Lading: A Comedy from Shakespeare and Fires Burn and Die Hard

“…An astronomical rise in the number of Ponzi schemes was recorded in Nigeria from 2015 with the advent of the Mavrodi Mondial Movement (MMM), which crashed after a couple of months, while similar movements crashed in a couple of days or even hours (Aluko and Olawuni 2021). The entry of MMM, its reception, and the relief some Nigerians enjoyed before it crashed have made it remain in the country with a recycled script-testimony to an aptronymic description of Ponzi scheme operation as "New dogs, old tricks" (Lewis 2012).…”

“…(Aluko and Olawuni 2021, 46) MMM operated until December 14, 2016, when it froze all investors' accounts; however, it resumed operation on January 13, 2017-an act that made investors pump in more money until it crashed in October 2017, swindling 3 million Nigerians to the tune of 18 billion naira (Asogwa et al 2017). Other Ponzi schemes-Ultimate Cycler, Twinkas, Givers Forum, Get Help Worldwide, and I-Charity-also enjoyed Nigerians' patronage (Aluko and Olawuni 2021;Asogwa et al 2017;Obamuyi et al 2018). The benefitting investors of these schemes, like songbirds, sang the good news to others to attract traffic to the websites of the schemes.…”

“…Osofisan ( 2012) is therefore prophetic of the doom many Nigerians are subjected to in Ponzi schemes that began with the Umana-Umana and Planwell schemes (Opue et al 2018) and triumphed in 2015 with the MMM (Aluko and Olawuni 2021). Bassey in Love's is the alter ego of Shylock, who personifies MMM and other Ponzi schemes where the likes of Fowosanu are doomed.…”

“…For instance, Tomola Marshal Obamuyi and colleagues (2018), while underscoring factors influencing Ponzi schemes in Nigeria, which include the get-rich-quick syndrome, friends' recommendations, and current economic situations, challenge the Nigerian government on the imperative of integrating Ponzi schemes into the financial system and subjecting them to the country's regulatory environment. Oluwasegun Aluko and Ibukun Olawuni (2021), however, contest such a recommendation, noting that Ponzi schemes have no legal framework because they are fraudulent; hence they cannot be identified with the authorities and cannot be sued. An economic appraisal of Ponzi schemes and living standards in Nigeria concludes that the negative effect thereof on the economy outweighs the positive (Opue et al 2018).…”

Financial frauds’ victim profiles in developing countries

“…For Nigeria, the participation of victims in investment schemes includes trusting the recommendation of a friend and charities provided by the fraudsters. Moreover, some churches encouraged their members to invest in financial programs that were later found to be fraudulent ( Aluko and Olawuni, 2021 ).…”