Economy
How Investors Lost $100m To MMM Ponzi Scheme
By Dipo Olowookere
If there is one scheme that is spreading in Africa like wildfire, then it is no other than the MMM Global Ponzi scheme that emanated from Russia in the 1990s.
Those who have wholeheartedly embraced this programme are from African countries facing economic downturns.
Zimbabwe and Nigeria have been the two main countries in Africa where the scheme is gaining more grounds.
Not too long ago, reports from Zimbabwe indicated that the MMM scheme had crashed, causing thousands of investors grieving over loss of their money.
The Nigerian government, through the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) have warned citizens not to invest in the programme, but these warning have largely been ignored.
It was the same story in Zimbabwe, where the country’s apex bank, the Reserve Bank of Zimbabwe, warned its citizens not the put their money in the scheme.
According to The Independent UK, the MMM Ponzi scheme was established by former Russian politician, Sergey Mavrodi, who went on the run when the original MMM, standing for Mavrodi Mondial Moneybox, “collapsed in the late 1990s, losing investors an estimated $100m.”
It reports that, “On its website, MMM Global unashamedly advertises itself as a scheme whereby new members ‘assist’ older members by paying a fee to join. Older members are allowed to withdraw money after a certain period of time, and receive bonuses for encouraging others to sign up.
“Mavrodi himself is reported to have gone into hiding after a separate entity designed to reward investors with the cryptocurrency bitcoin – dubbed the ‘Republic of Bitcoin’ – folded in April this year.”
It was also reported that a criminal investigation has been launched into MMM Global branch in South Africa, after a probe by the National Consumer Commission “found something” to suggest the scheme was acting illegally.
It was gathered that Zimbabweans started to notice changes when investors reported being unable to withdraw any funds earlier this month.
One of them told The Herald newspaper that, “When we started putting our funds in the scheme one could get assistance within seven days but things later changed to 14 days and when we were shut out the waiting period was 21 days.
“What it simply means is that the number of people in need of help has outnumbered the number of people joining. Right now we have nowhere to get our money which we invested.”
However, some members of MMM Global across Africa have continued to defend its legitimacy, publishing screenshots showing withdrawals as proof the scheme pays out.
An anonymous member told business website Fin24 that, “MMM honestly tells people how it really works and do not promise people any return on the investments.
“As a donation programme, how is it possible to lose your donation? In MMM people ask each other to help them. It depends on the members themselves to maintain the continuation of the process of the provision of help to each other.”
Additional information used in this story was sourced from The Independent UK
By Dipo Olowookere
Sustained profit-taking in high-cap stock like Dangote Cement deepened the woes of the Nigerian Exchange (NGX) Limited on Wednesday.
The domestic equity market lost 1.47 per cent at midweek as the National Bureau of Statistics (NBS) revealed that inflation in Nigeria was further elevated in December 2024 by 34.80 per cent, prompting investors to maintain their selling pressure stance.
Data showed that the industrial goods index depreciated by 4.70 per cent at the close of business as the insurance sector slumped by 3.47 per cent.
However, the consumer goods space improved by 0.99 per cent, the energy counter appreciated by 0.15 per cent, and the banking industry gained 0.02 per cent.
When the closing gong was struck by 2:30 pm to signal the close of trading activities yesterday, the All-Share Index (ASI) was down by 1,529.59 points to 102,095.95 points from 103,625.54 points and the market capitalisation went down by N933 billion to N62.257 trillion from N63.190 trillion.
Like the preceding trading day, investor sentiment was weak at midweek after Customs Street ended with 28 price gainers and 39 price losers, implying a negative market breadth index.
Universal Insurance and Dangote Cement were the biggest price losers as they shed 10.00 per cent each to close at 63 Kobo, and N387.90, respectively, as John Holt declined by 9.99 per cent to N8.47, Transcorp Power lost 9.97 per cent to close at N324.00, and Omatek tumbled by 9.89 per cent to 82 Kobo.
Conversely, Dangote Sugar, NASCON, and Sunu Assurances chalked up 10.00 per cent each to sell for N36.85, N38.50, and N6.71, respectively, as SAHCO rose by 9.95 per cent to N33.15, and Austin Laz grew by 9.94 per cent to N1.99.
Business Post reports that investors bought and sold 435.5 million equities valued at N9.4 billion in 12,098 deals during the session versus the 503.3 million equities worth N12.6 billion traded in 12,900 deals on Tuesday, indicating a decline in the trading volume, value, and number of deals by 13.47 per cent, 25.40 per cent and 6.22 per cent apiece.
Universal Insurance topped the activity log with the sale of 70.3 million shares for N46.4 million, AIICO Insurance traded 39.7 million equities valued at N67.5 million, Access Holdings exchanged 16.8 million stocks worth N414.0 million, Livestock Feeds transacted 16.8 million shares valued at N106.8 million, and Nigerian Breweries traded 16.2 million equities worth N518.2 million.
By Aduragbemi Omiyale
As the world, particularly the United States prepare for the second coming of Mr Donald Trump to the White House next Monday, there have been significant interest in the cryptocurrency market.
Mr Trump, who was the President of the US from 2017 to 2021, won the 2024 presidential election by defeating the current Vice President, Ms Kamala Harris, who was the candidate of the Democratic Party, and will be sworn-in on Monday, January 20, 2025, for a second term in office.
The Head of Research at Derive.xyz, Mr Sean Dawson, while commenting on the renewed interest in Bitcoin ((BTC) and other digital coins in the market, said, “In the last 24 hours, BTC trading activity has surged, with open interest hitting an impressive $237 million.
“With 38 per cent of BTC contracts being calls bought and 37.3 per cent puts bought, it’s clear that traders are positioning for increased volatility, particularly with the inauguration just days away.
“This appetite for market swings likely reflects growing uncertainty in U.S. markets as expectations for a near-term rate cut diminish.”
“Additionally, bearish sentiment appears to be gaining traction, with BTC puts now making up 40 per cent of all open interest, a sharp increase from 20 per cent just last week. This shift suggests traders are hedging against potential downside risks as we approach the inauguration.
“Implied volatility (IV) trends further highlight this heightened uncertainty. BTC’s 7-day ATM IV has risen by 3 per cent to 56.5 per cent, while the 30-day IV is up 1.5 per cent, now at 57.5%. This steady climb points to a more volatile market sentiment leading up to the event,” he further said.
”ETH, on the other hand, has seen an even more pronounced spike in IV. Over the past 24 hours, ETH’s 7-day IV has surged by 6 per cent to 74 per cent, nearly double the rise seen in BTC.
“Meanwhile, its 30-day IV has climbed 2.5 per cent to 69.5 per cent. This disparity suggests ETH traders are anticipating greater immediate volatility, possibly due to its higher sensitivity to macroeconomic shifts and speculation surrounding post-inauguration policies.
“As the inauguration draws near, these trends underline a pivotal moment for traders, with both BTC and ETH markets reflecting a mix of caution and readiness for potential sharp moves,” Mr Dawson stated.
By Adedapo Adesanya
Nigeria’s inflation hit 34.80 per cent in December 2024 from 34.60 per cent in November 2024, spurred by festive activities.
This was disclosed by the National Bureau of Statistics (NBS) in its first published data after almost a month of blackout on its website following a purported hack.
The December 2024 headline inflation rate showed a marginal increase of 0.20 per cent compared to the November 2024 headline inflation rate.
This was due to December festive period increases in demand for goods and services.
On a year-on-year basis, the headline inflation rate was 5.87 per cent higher than the rate recorded in December 2023 (28.92 per cent). This shows that the headline inflation rate (year-on-year basis) increased in December 2024 compared to the same month in the preceding year (i.e., December 2023).
On the contrary, the month-on-month basis, the headline inflation rate in December 2024 was 2.44 per cent, which was 0.20 per cent lower than the rate recorded in November 2024 at 2.64 per cent.
This means that in December 2024, the rate of increase in the average price level is slightly lower than the rate of increase in the average price level in November 2024.
Meanwhile, the food inflation rate in the festive month was 39.84 per cent on a year-on-year basis, 5.91 per cent points higher compared to the rate recorded in December 2023 at 33.93 per cent.
The rise in food inflation on a year-on-year basis was caused by increases in prices of the following items; yam, water yam, sweet potatoes, etc (potatoes, yam & other tubers class), beer, pinto (tobacco class), guinea corn, maize grains, rice, etc (bread and cereals class), and dried fish-sadine, catfish dried, etc (fish class).
On a month-on-month basis, the Food inflation rate in December 2024 was 2.66 per cent which shows a 0.32 per cent decrease compared to the rate recorded in November 2024 at 2.98 per cent.
The decline can be attributed to the rate of decrease in the average prices of local beer (burukutu), pinto (tobacco Class), fruit juice in tin, malt drinks, etc (soft drinks class), rice, millet, maize flour, etc (bread and cereals class) and water yam, irish potatoes, coco yam, etc (potatoes, yam & other tubers class).
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