According to Investopedia, Ponzi schemes are fraudulent investment scams promising high rates of return with little risk to investors mainly by remitting returns for earlier investors with money taken from later investors. They are also known as pyramid schemes. In many Ponzi schemes, the fraudsters do not invest the money but they use it to pay those who invested earlier and keep some for themselves until the entire scheme collapses and later investors lose their money. 

There is a correlation between the level of Ponzi schemes unraveled within the previous years and the downturn of our economy. Ponzi schemes often collapse during general economic downturns, because more people want to redeem than invest. Therefore, it is bad for monetary policy since it artificially stimulates the economy during good times and represses it in downturns.

The North West region of Cameroon has suffered a great loss due to the Anglophone crisis. This has caused a great downshift in the economy, since many businesses can go for days without opening due to instability pushing them to try other means of making money such as online investments of which the easiest and most accessible usually turn out to be Ponzi schemes.

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Before the Anglophone crisis, more than 70% of the population of Bamenda (The capital of the North West region of Cameroon) practiced agriculture as a main source of living. Due to the Anglophone crisis, farmers had to abandon their farms because they lived in high risk areas. The World Food Program estimated that over 295,000 people were severely food insecure June and August 2022 in Cameroon. 

This precarious situation has rendered many people jobless due to abandonment of farms and closure of most businesses. Additionally, many schools have been closed down due to the insecurity with students being kidnapped and killed randomly. This has caused many youth to go back home and try alternative means of generating income to sustain their livelihoods.

 The ongoing crisis in the North West region of Cameroon has been characterized by people spending more time at home leading to more time spent on social media where they come across these Ponzi and Pyramid schemes. In a quest to make money and combat their financial inertia, they tend to invest their money in these online platforms which promise abundant returns. People aged 21 to 30 make up 28% of purchase scam victims while 4% are aged between 61-70 and just 2 who are over 70. It is evident that the highest people who are getting scammed are the former employed youth especially those who were employed in the collapsed financial institutions The loss of their jobs coupled with the loss their invested funds has forced the affected people to borrow money from their family and friends to survive leading to physical, mental and emotional distress.

The agents, distributors and customers of the scheme companies try to convince the new recruit with bogus claims about earning huge money. If the recruit does not seem interested, they introduce terms like lifetime income and royalty payment through binary activity. They target vulnerable people who are desperate to make a living later fleecing them of their hard earned money like it is stated in this video;

 It has been observed over many years that Ponzi schemers seek to exploit vulnerability especially during times of economic difficulty where  often there is a corresponding increase in fraudulent schemes as is discussed in  the video below;

 The main implications of Ponzi schemes include loss of savings and severe mental and emotional distress that can in the worst case scenario lead to death. The lack of justice or a way to recoup lost investment further distresses victims of fraud.  The effects of Ponzi Schemes like MONEYMAN and CHYMALL on the socio-economy of Bamenda included; loss of life savings, redirection of savings to unproductive areas, incurring fiscal cost on the tax payer through government bail outs, and diversion of deposits from banks and increasing non-performing loans:

Tax revenue trends confirm this decline in economic activities which has affected the implementation of public investments. The financial sector has also been impacted by the disruption and insecurity causing mass jobs loss as a result of the violence leading to the collapse of economic structures. According to the Computable General Equilibrium model results, the tax revenue collected by the government in 2019 was 4.8 percent lower than it would have been without the crisis and has continued downgrading to date. The combined effects of lower income (due to reduced employment) and higher consumer prices (due to supply chain disruptions) have inflicted heavy tolls on household welfares making people more vulnerable to Ponzi schemes.


In the images found above, we can see a few people who suffered losses from these Ponzi schemes. Many of them took to their social media to call out the fraud in a bid to warn others to avoid being scammed.. The politicization of such fraudulent schemes also calls for attention since Politicians and many other influential people blamed and pointed accusing fingers at the victims instead of protecting them and calling for the prosecution of the fraudsters. 


 Conclusively, Ponzi schemes continue to gain grounds in the economy due to economic desperation and the government’s unwillingness to tackle this illegal schemes. It is certain that it will continue for a long time, unless awareness is spread continuously to discourage people from being taken in by the false promises of the fraudsters. In the case of the North West, many people have been rendered penniless, and many others have been left in debt due to the effect of these financial loss and economic impairment schemes. Cases of victims in police stations are recorded every day, due to the fact that they got involved in loans they couldn’t pay back, only to fuel these Ponzi schemes.



  • Be wary of any investment opportunity that seems too good to be true, such as the one that promises an extraordinarily high return with little risk.
  • Perform thorough research on any business, project or person you are considering investing your money in. This due diligence will help raise any alarms before it is too late. 
  • The first rule on investments is that if you do not understand how the instrument works don’t sink your funds into it. This applies to all schemes that promise ‘guaranteed income’ and ‘fast and huge returns’ within a short time. In financial investment terms all such schemes are huge risks.
  • Seek advice from an impartial third party, such as an independent financial advisor, before you part ways with your hard-earned savings.
  • Report to the highest authorities and take legal actions against the companies.

Government authorities

  • Pay more attention to the perpetrators of the act so that they cannot escape punishment.
  • Help victims recover the money that was lost in order to better the economy.


  1.  “Ponzi Scheme”. U.S. Securities and Exchange Commission. Retrieved 9 June 2021. Public Domain This article incorporates public domain material from websites or documents of the United States Government.
  2. Jump up to:a b Zuckoff, Mitchell. Ponzi’s Scheme: The True Story of a Financial Legend. Random House: New York, 2005. (ISBN 1-4000-6039-7)
  3. ^ Markopolos, Harry; Casey, Frank (2010), No One Would Listen: A True Financial Thriller, John Wiley and Sons, p. 50, ISBN 978-0-470-55373-2
  4. ^ “Ponzi Schemes”. US Social Security Administration. Archived from the original on 1 October 2004. Retrieved 24 December 2008.
  5. Jump up to:a b c “Ponzi Schemes – Frequently Asked Questions”. U.S Securities and Exchange Commission. U.S. Securities and Exchange Commission. Archived from the original on 26 June 2012. Retrieved 23 June 2012.

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