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Nigeria’s Securities and Exchange Commission has revealed that Nigerians have lost more than $218 million (approximately N316 billion) to Ponzi schemes and illegal fund managers over the past few years. According to the agency, greed and ignorance among Nigerians are some of the factors sustaining the menace.
The information was disclosed by Abdul Rasheed Dan-Abu, the Head of FinTech and Innovation Department at the Commission, at the training organized by the SEC for finance journalists in Abuja.
Dan-Abu revealed this information as part of a presentation on combating investment fraud in Nigeria. In his presentation, he described Ponzi schemes as fraudulent investments that pay returns to old investors with funds from new investors rather than from any genuine business activity.
Nigerians lose N316 billion to Ponzi schemes
Speaking on the issue, Dan-Abu mentioned that the people in charge of these investments are not doing anything of note. “They are just collecting people’s money and using it to pay the initial investors.
At some point, when there are no new investors, the whole thing crashes and the operators disappear,” he said. In his presentation, he mentioned that the desire for quick wealth has pushed many Nigerians to fall victim to these types of scams.
“Everybody just wants to get rich today. That is actually what makes people fall into this trap,’ he noted. ‘Even the people who are greedy now are more educated than those who experienced Charles Ponzi’s first scheme. Education has not stopped greed.”
Dan-Abu recalled several Ponzi schemes that have shut down in the past, noting that one of them offered Nigerians monthly returns of about 30%. He said even after it crashed, some people still went back to reinvest. “Even after MMM shut down, they came back and told people that if you pay a certain amount, you will get access to your lost money. People still paid. That shows you how greed blinds people,” he said.
He also recounted how a fraudulent scheme called New Nation, disguised as a government-endorsed empowerment program, asked women in rural areas to pay to enjoy specific benefits.
Dan-Abu noted that about 155,000 rural women in total had their funds trapped in the investment program. “Many sold their houses and cars to invest because they believed it was real. It tells you how dangerous this thing is when people do not ask questions,” he said.
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In his presentation, Dan-Abu mentioned that these operators employ aggressive marketing tactics on social media groups. They go on platforms like WhatsApp to create groups and lure unsuspecting investors with promises that look too good to be true. ‘They promise high returns with little or no risk. But there is no business in the world where you can make a lot of money in a short time without risk. It is not possible,’ he said.
However, he urged Nigerians to be careful and check with the Commission before committing funds to an investment. “Anytime you see an investment that looks new, the first thing you should do is ask if it is registered with the SEC. It is your sweat, your hard-earned money.
If it is not registered, it is already illegal,” he warned. He also urged journalists to support the campaign against Ponzi schemes, noting that if they deliver warnings to users weekly, they would refrain from investing funds into fraudulent platforms.
In his remarks, Dr Emomotimi Agama, Director-General of the Commission, said Nigeria needs to do something about digital assets, noting that it cannot afford to be lax in regulating them.
He mentioned that robust digital asset oversight is needed to protect investors and build trust in the system. “Regulation is not about restriction; it is about building trust, ensuring that innovation serves progress and not predation,” Agama said.
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