As Loom Nigeria Berths
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 in Uncle Sam 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 percent profit if they kept their money with him for fourty-five days or 100 percent profit if they kept their money for ninety 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 away with, the music in the party kept playing on with word spreading around like wild fire about the novel money making scheme. Like 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 assure his ‘immortality.’
When the Sergey Mavrodi ‘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 the returns of fifty percent 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 under than just sweet talking potential customers.
Then came the great bust in December 2016 when it was suspended with the promise to reopen it in January 2017. That promise was never fulfilled as billions of naira disappeared without a 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 as 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 fail to learn from history. The promises are so mouthwatering – an investment as low as between 1000 naira to 13000 naira with 8 times the 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 as they operate in closed groups on Facebook and Whatsapp. We remember the wonder banks and how their crash led to untold hardship by Nigerians. The wonder banks have resurfaced with the ponzi schemes spread by the power of the new media and internet.
The reason why ponzi schemes thrive in the country is as a result of the failed state that our nation 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 made us develop a collective amnesia that makes us rush like pigs to the slaughter at every ponzi scheme that comes our way.
The Securities and Exchange Commission issued a stern warning against the participation in the scheme. While we commend this, its warning is weak as 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.
The Buhari led 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 warnings, 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 industrialization 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 been found in the Kainji dam.
The Esama of the Benin Kingdom, 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! The presence of Justice Zainab Bulkachuwa in the election petitions tribunal will make the chances of Atiku getting justice akin to trying to catch a pie in the sky. This is an argument for another day.
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 people as we 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 sort of ponzi schemes as they do nothing but breed sloth 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 and rather channel their energies towards productive ventures in spite of the daunting challenges. We should be visionary in leaving something behind for the next generation to enjoy – ponzi schemes is never designed that way.
The lure of it should be spat out.
Ademiluyi writes from Lagos.