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Apart from many financial literacy campaigns and ponzi scheme collisions over the past decade, Nigerians continue to be victims of fraud, and the scale of losses is very surprising.
For example, CBEX has added its name to the increase in high profile fraud that continues to increase in Nigeria, with more than ₦ 1.3 trillion reportedly sucked up from unpurder investors. Launched in July 2024, the scheme to attract participants with a promise of 100% investment return within 30 days.
According to data from the Nigeria Inter-Bank Settlement System (Nibss), Nigeria lost ₦ 17.67 billion due to fraud in 2023 alone, an increase of 496% of ₦ 2.96 billion was lost in 2019.
This troubling trend underlines the continuous vulnerability in the Nigerian financial landscape, which continues to be exploited by fraudsters, often with the guise of investment opportunities that are too good, such as the Ponzi scheme that has interfered with the country for years.
Ponzi scheme – Fraud Investment Fraud that promises high returns with little risk – has long found fertile land in Nigeria. From MMM (MAVRODI MONEYBOX MONDIAL), which collapsed in 2016 after deceiving millions of Nigerians, to cyclists, Loom Nigeria, and Racksterli, each new wave promised wealth and leaving traces of financial ruins.
MMM, for example, promises 30% monthly returns and at the peak has more than 2 million Nigerian users before finally collapse, the cost of billions of Naira. Apart from its destruction, Nigerians continue to protect similar schemes in what seems to be a blend of despair and hope, driven by poverty, unemployment, and general distrust in traditional financial institutions.
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According to Nibss dataThe number of annual fraud has increased by 112% from 44,947 in 2019 to 95,620 in 2023.
Modern fraud face
Data from 2022-2023 revealed that the most effective fraud tactic in Nigeria was a social engineering, which contributed losses ₦ 8.03 billion shocking. This method often mimics the Ponzi style approach, convincing the victims to divulge personal information or send money for reasons of false assistance, investment opportunities, or online friendship.
“False Assistance” – Often seen in online communities where fraudsters pose as agents who help offer financial assistance or urgent solutions – responsible for losses ₦ 1.01 billion. This scheme exploits the same psychological vulnerability as the Ponzi scheme: trust, urgency, and rapid allure of financial assistance.
Other usual fraud tactics include websites/server hacking (₦ 2.44 billion), robbery, PIN compromise, and internal collusion – all of them refer to a wider ecosystem of financial insecurity.
Several factors contribute to Ponzi’s persistence and loss related to fraud in Nigeria: economic difficulties, financial illiteracy, enforcement of weak regulations, and low trust in formal banking.
The scale of financial fraud has moved beyond personal losses. With ₦ 17.67 billion missing in just one year, the cumulative impact on the economy is very large. Apart from the collapse of MMM and recurring warnings, the numbers show that the Nigerians remain very vulnerable to fraud, especially those that reflect the structure and promises of the Ponzi scheme. With developing fraudsters and increasing losses, Nigeria must face not only scammers but conditions that allow them to develop.
By: James Odunayo
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