Ponzi Schemes: An Analysis on Coping with Economic Recession in Nigeria

Abstract

The proliferation of Ponzi schemes in Nigeria appear to coincide with the official declaration of economic recession in early 2016. It is therefore pertinent to empirically investigate the nexus between the recession and Ponzi schemes in the country. Anchored theoretically on Robert Merton’s Strain Theory the study was guided by two research objectives and one hypothesis. The snow-balling sampling technique was used to select 135 Ponzi scheme participants from Rivers, Bayelsa and Anambra States. Descriptive analysis of the results was undertaken in tables, charts and graphs. The findings revealed amongst others that MMM, Ultimate cycler, Givers Forum, Get Help World Wide were the major Ponzi schemes in Nigeria. It was also found that Ponzi schemes are a coping strategy for economic recession. The paper posits that until the economic downturn is adequately addressed and the economy revamped, Ponzi schemes would continue to thrive in Nigeria. It recommended economic revitalisation through effective economic diversification policies that will enhance provision of socio-economic livelihood as palliatives to recession induced strain.