Ponzi Schemes: A Deeper Look At Nigeria’s Enduring Economic Strain 

Ojeifoh Okosun

It seems almost predictable now. Every few years, a new Ponzi scheme captures the hopes — and ultimately destroys the finances — of thousands of Nigerians. From Umanah Umanah in the 1980s to MMM’s devastating collapse in 2016, to the more recent agro-investment scams that promised miracle profits from farming ventures, the story repeats itself with numbing regularity.

The latest is the Crypto Bridge Exchange (Cbex), a cryptocurrency-based fraud that capitalized on today’s buzzwords and economic desperation to swindle people out of their hard-earned money. As usual, public discourse has largely focused on blaming the victims. Commentators quickly point fingers at supposed “greed,” “get rich quick syndrome,” and a “lack of patience” among Nigerians. Yet this explanation is shallow, unfair, and dangerously shortsighted. It does not engage with the bigger question: why does the Nigerian environment remain so fertile for such scams, decade after decade?

Using strain theory, a foundational concept from sociology introduced by Robert K. Merton, it becomes clear that the continued success of Ponzi schemes in Nigeria is less about personal failure and more about systemic neglect. It is the result of a government that has failed to address the deep-rooted economic pressures pushing citizens towards high-risk, illegitimate ventures in a desperate bid for survival and success. Strain theory explains that in societies where there is a strong emphasis on achieving certain culturally approved goals — like wealth, success, and social status — but where access to legitimate means to achieve those goals is blocked for large segments of the population, individuals experience strain. This strain leads some to seek alternative, sometimes illegitimate, means of achieving success. Nigeria today fits this description perfectly.

The ideal of financial success is deeply ingrained in Nigerian society. From a young age, people are taught that wealth equals dignity, security, and respect. Everywhere, there are symbols of success: luxurious cars, lavish parties, social media influencers flashing designer goods, and religious leaders who equate divine favour with financial prosperity. Yet the legitimate paths to achieving these goals — quality education, stable employment, entrepreneurship — are fraught with obstacles. Youth unemployment is staggeringly high, hovering at over 40% according to recent reports by the Nigerian Bureau of Statistics (NBS). Inflation has crippled purchasing power, while salaries remain stagnant or nonexistent for millions.

In this context, Ponzi schemes like Cbex offer not just a promise of wealth but a perceived lifeline. The language of Cbex advertisements was filled with urgency and hope: “secure your financial freedom,” “be your own boss,” “earn passive income.” For a struggling teacher whose salary has been unpaid for months, or a small business owner whose profits have been erased by the rising cost of goods, these promises can feel like rational opportunities, not reckless gambles.

Moreover, Cbex, like many before it, cleverly exploited new tools that previous fraudsters could only dream of. It used cryptocurrency — a complex, poorly understood financial instrument — to give the illusion of modernity and legitimacy. It harnessed social media, especially WhatsApp and Telegram groups, to spread fake testimonials, staged success stories, and viral marketing campaigns. In a country with over 30 million active social media users, and where information spreads faster than wildfire, these platforms provided Cbex with an almost unstoppable reach. However, the deeper problem is not just economic strain or technological manipulation; it is the Nigerian government’s continued unwillingness or inability to intervene decisively at the roots of the problem.

There is a consistent pattern: after each Ponzi collapse, government agencies issue warnings, perhaps make a few arrests, and then move on until the next scandal erupts. What is missing is a coherent, sustained effort to dismantle the economic and social conditions that make these scams so successful in the first place.

Financial literacy, for example, remains alarmingly low. A 2020 survey by Enhancing Financial Innovation & Access (EFInA) showed that only about 36% of Nigerian adults are considered financially literate. This means millions are operating in complex financial environments without the necessary skills to distinguish legitimate investment opportunities from scams. Yet nationwide financial education campaigns are rare, underfunded, and often reach only the already-privileged urban elite.

Enforcement is equally weak. Many fraudulent investment schemes operate openly for months, even years, often advertising on mainstream media without any intervention. The regulatory bodies, such as the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN), often act only after significant damage has been done. Even then, prosecution is sluggish, and convictions rare. Perpetrators are sometimes treated more like minor lawbreakers than like the architects of mass financial ruin they truly are.

There is also a moral dimension. In a society where large-scale corruption among the political elite is often met with impunity, where stolen public funds are laundered openly without fear of punishment, it becomes difficult to enforce a culture of financial accountability at the lower levels. If high-ranking officials can defraud the nation and retire into luxury, why should the average person not take a “shortcut” when offered?

The government’s failure to act decisively is not just about incompetence; it reflects a lack of political will. True reform would require confronting uncomfortable realities: massive economic inequality, the failures of the education system, the collapse of trust in public institutions, and the urgent need for economic diversification away from oil dependency. These are complex, systemic challenges that require more than press releases and task forces. They require vision, courage, and long-term investment — qualities that have, tragically, been in short supply.

In the meantime, millions of Nigerians remain trapped in a cycle of hope and despair, vulnerable to the next scam that promises an escape from poverty. When the next Cbex arises — and it will — it will not be because Nigerians suddenly became greedier. It will be because the structural conditions remain unchanged.

The path forward is clear, even if it is difficult. Nigeria must invest heavily in financial education, ensuring that every citizen, from the market woman to the university graduate, has basic financial literacy.

Regulatory agencies must be empowered to proactively monitor and shut down suspicious schemes before they claim victims. Economic reforms must prioritize creating real, accessible opportunities for legitimate wealth creation. Corruption must be fought with genuine seriousness, not just empty slogans.

Most importantly, the narrative must change. Nigerians who fall victim to Ponzi schemes are not criminals; they are victims of a system that offers them few viable alternatives. Blaming them serves only to absolve the real culprits: a state apparatus that has failed to protect and empower its people.

Until we tackle the underlying economic and social strains that drive citizens into the arms of fraudsters, the tragic cycle will continue. And with each collapse, more Nigerians will be thrown into financial ruin they may never recover from — not because they were foolish, but because their country failed them.

* Dr. Okosun, a social scientist, researcher, and cyber criminologist specialising in victimology,  teaches Statistics in Criminal Justice and Corrections at Texas Southern University.