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On Tuesday, when the promoters of Mavrodi Mondial Movement (MMM) announced the freezing of the accounts of Nigerian participants for “one month,” my cousin sent me something, which amused and still amuses me. Entitled “Safety Tip,” the message read:
“Make sure you are very close to your friends and relatives, who are into MMM. Observe their movement and monitor where they are going. If you see any of them going close to a river, ocean or stream, raise an alarm and invite the police. If you see any of them talking to him or herself, alert the nearest psychiatrist hospital. If any of them begins to behave angrily and break or destroy things, please, notify your friends and use cow rope to tie the person.”
The message may be a joke crafted by someone, who is taunting Nigerians who enlisted for the “magic money movement in Nigeria,” but it highlights the consequences of the crash of the MMM scheme, which has spread across the country like a wild fire. If the MMM scheme crashes, billions of Naira would be lost by Nigerians, who opted for this quick money avenue, without considering the implications. A conservative estimate puts the number of Nigerians involved in the MMM scheme at three million. I have been doing some calculations since the figure of participants was released. If these three million Nigerian had put in N10, 000 each, it means that about N30billion is in the cooler now that the scheme has been frozen. And if these three million Nigerians had put in an average of N100, 000 each, it means that N300billion is at stake. Therefore, if MMM closes now, we should weep because for a country to lose such whopping sum in one fell swoop, at a time of recession, is a big tragedy.
To be sure, since the frenzy about MMM started, I have been wondering why millions of Nigerians should dabble into something they do not really know much about. Many of the participants have argued that it is a genuine and legitimate means of making money, which helps to alleviate the hardship in the country. The question is: What is the driving force? A system, which gives money, when it is not an investment, fixed deposit or stock cannot be anything other than Ponzi scheme. It is a voodoo economic scheme, which is an equivalent of iwere nka, eriem ego, iwere nka, ego gi ala (if you pick this, you win, but if you pick the other one, you lose), which fraudsters used in those days to defraud people, before Internet scam or “yahoo yahoo” started.
An official statement on the MMM Nigeria website said this: “MMM is not a bank. MMM does not collect your money. MMM is not an online business, HYIP, investment or MLM program(me). MMM is a community where people help each other. MMM gives you a technical platform, which helps millions of participants worldwide to connect those who NEED help to those who are ready to PROVIDE help, for FREE. All transferred funds to another participant are your help given by your own goodwill to another one, absolutely gratis.” If something that is not a bank, business or investment is “yielding money” what then is it? The truth of the matter is that some people are playing on the intelligence of Nigerians, who are fixated about the “small money” they would make, in the interim, and overlooking the dangers therein. MMM takes money from one person and gives another, making those involved believe they are in “business.” The participants are like a grasshopper roasting in the fire, emitting oil, but thinking it is enjoying, as the Igbo adage goes.
Yes, MMM is something built on nothing. It is just a system where money is taken from one person and given to another. And as more people join, the chain continues. For the avoidance of doubt, this is how MMM works. “Marvo A” agrees to “provide help” and, therefore, pledges N100, 000, for instance. He would be asked to send the money to say “Marvo B,” who “needs help.” After 30 days, “Marvo A would declare that he “needs help.” And “Mavro C,” who had pledged to “provide help,” would be asked to send to “Mavro A” the N100, 000 earlier pledged, plus interest of 30 per cent. And when Mavro B and Mavro C “need help,” other people down the line would be asked to send money to them. Therefore, as people get paid, the money of others would be “hanging.” And if the bubble bursts, those whose money is “hanging” would be the ultimate losers.
It is shocking how values have so degenerated in Nigeria that people prefer to make money without doing anything. This quick money syndrome is, indeed, very strange. I shudder how people feel comfortable making money just sitting in the comfort of their homes, using the Internet to “render help” and thereafter “request help ” as in MMM. I wonder if those who are crazy about MMM and who pride about it, to the extent of calling those advising them against the scheme “busy body,” have ever asked themselves why the promoters of MMM brought it to Nigeria. Is it because these people love them? Or is it because they love Nigeria and, therefore, want to reengineer the country’s economy, with the view to bringing an end to recession?
Believe it or not, the promoters are smart individuals, who want to rip off others. They will claim that money so pledged does not come to them. Yes, indeed. But does anybody know how much these promoters have made so far? The trick is this: The MMM promoters would be the first to offer “help.” They would invest money, providing help and as other people join, the promoters would begin to ask for help at high stakes. They would make their money. When they would have made enough money, they would bail out. And the scheme will crash. It is like what happened in the stock market.
People and companies lost money running into billions of naira in the stock market. There were many others who made billions of Naira too. Some of those who made big money were behind the problem in the stock market. What they did was simple: They rushed in to purchase penny stocks, stimulated high prices later at the stock exchange. When people saw price going higher, they rushed in to buy, believing that it would continue to rise. At that very high price, members of the unscrupulous clique offloaded their shares. Thereafter, price of whatever stock involved crashed. And those who bought at high price lost their investment, with the market in bearish trend.
This fraud also happened with banks’ stocks, wherein unscrupulous bank officials and their cohorts outside colluded to make money from sexed up shares. First, banks’ stocks went low and then mopped up by insiders/collaborators. Thereafter, the banks did public offers, which were usually oversubscribed. Soon after the public offers, prices of the banks’ stocks went very high. Those who bought shares during the public offers were not qualified to sale, as they did no have share certificates. The bank insiders/cohorts, who had bought shares cheap, offloaded them, made big money and then bailed out. And soon after, banks stocks crashed. That was how the stock market was destroyed. The unfortunate ones lost millions, while the “smart ones” smiled to the banks.
I will not be a prophet of doom to say that what happened at the stock market and with the “wonder banks” will happen in the MMM scheme. The “Mavros” may be adamant, believing that nothing would happen, as they are making money. However, the day of reckoning would come when the promoters of this scheme are satisfied with money they have made themselves, using the same platform, and, therefore, bail out. Those whose money has not “matured” will lose their investment and pay for the sins of all the beneficiaries. That is the bottom line of what Central Bank of Nigeria (CBN) has been saying.
The way out, therefore, for those who are into it is to cut their loss, if the accounts are ever “unfrozen” on January 13, 2017, bail out and save themselves the coming catastrophe. What happened in South Africa should serve as enough lesson. Those who have ears, let them hear.