Nigerians have come to realize that recession is not just a word, contrary to the statement of the Finance Minister, Mrs. Kemi Adeosun.“Recession” has slowed down capital and labour in the country. This has made decisions regarding finances to go through multiple and careful thoughts, especially for citizens running frugal budget. The advent of the current recession in the Nigerian economy has made quick-money schemes such as betting and lotteries enjoy massive patronage. The latest of the flock is the Mavrodi Mondial Moneybox widely referred to as – MMM.
MMM operates in the form of payment of quick returns to the first set of investors from money invested by later investors. Investors are paid a certain percentage of the money they put into the scheme after a specified period. MMM has been in operation in Nigeria for a year now and a lot of Nigerians seem to have been blessed by this oasis in the desert. Many more Nigerians hope to join the ‘lucky team’ as testimonies about this program continue to spread.
However,the prognosis on MMM tells that the scheme is bound to collapse. It has been said to be an unsustainable and terminal financial operation since its payments of investments and return of bonuses to investors depends on the payment of new of investors. If indeed, new subscription to this scheme steeps, where would the 30% bonus on investment come from? Since the money/ help rendered are not used for businesses with interest rate demand in return, how is the extra cash raised? These are important questions that MMM subscribers should ask. Questions about the validity of MMM are usually countered with the now popular saying “MMM pays”, but those who say this should be reminded that it pays only for a period and it is not a long-term stream of income. It should be noted that when it crashes, it buries people’s investment and the case of the Indians that committed suicide should serve as caveat emptor.
Considering that the scheme reportedly crashed in other countries such as Zimbabwe and South Africa, it is rightly forecasted that it crash in Nigeria would is inevitable. The Nigerian government has since made attempts to warn Nigerians but beneficiaries would argue that the government is against this scheme because tax cannot be imposed on MMM operations. It is not a war between the governments and MMM administrators, but a valid warning to Nigerians against MMM to avoid the huge economic backlash that would ensue the predicted crash of MMM. The government of Zimbabwe and South Africa also made attempts to warn their respective citizens from participating. The Chinese government took even stricter measures against this particular program in their country. All these warnings and signs point to towards one direction, the coming crash of MMM. Although MMM is the “wonder-bank” of today, its days are numbered.
This article was written by Ibironke Oluwatobi. He tweets via: @ibironketweets