The International Monetary Fund (IMF) says that the tough economic reforms introduced by President Bola Tinubu’s administration have yet to have a positive trickle-down effect on average Nigerians, nearly two years after they were implemented.

IMF Mission Chief for Nigeria, Axel Schimmelpfennig, made this known in a statement on Friday, April 18, 2025.

Upon assumption of office in May 2023, the President launched sweeping economic policies aimed at reforming the country’s public finances. Though the decisions have led to widespread discontent and criticism of the administration, the government insisted that they were necessary to redirect the nation’s economic trajectory, an argument fully supported by the IMF.

However, as these policies continue to negatively impact many ordinary Nigerians, who are currently living through the worst cost-of-living crisis in a generation, the Fund overserved that poverty and food insecurity remain major concerns.

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The government has taken “important steps to stabilise the economy, enhance resilience, and support growth,” Schimmelpfennig wrote.

However, he said those “gains have yet to benefit all Nigerians, as poverty and food insecurity remain high,” following nearly two weeks of routine discussions with the Nigerian government officials and civil society representatives.

The IMF chief warned that “the outlook is marked by significant uncertainty,” noting that increased global uncertainty and falling oil prices will also impact the Nigerian economy.

Regardless, Schimmelpfennig said Tinubu’s reforms have put the economy in a “better position to navigate this external environment.”

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Tinubu’s reform measures include unifying the forex market to reflect the naira’s true value, removing subsidies on fuel, and ending the Central Bank’s financing of the fiscal deficit.

ALSO READ: Expert speaks on why Nigeria’s economic growth hinges on policy consistency

A World Bank report in October 2024 said poverty in Nigeria had surged over the past years, with more than half the population now affected, as 129 million people live in poverty.

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Ponzi schemes like CBEX have repeatedly exploited gaps in financial literacy and regulatory enforcement, inflicting deep wounds on the nation’s economy and eroding public trust.

By promising unrealistic returns and relying on ever growing recruitment, these schemes collapse once new contributions dry up, leaving investors with crippling losses. They damage the integrity of formal banking, clog payment systems with suspect transactions and overwhelm enforcement agencies.

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The following reminders reveal how these operations unfold and the lasting harm they cause to Nigeria’s financial stability.

1. Promises of guaranteed, above market returns

Operators lure investors with pledges of fixed returns far above genuine market yields, often 20 to 50 percent per month. They use enticing membership tiers and early‑joiner bonuses to build large pools of capital. Marketing materials and online ads highlight fabricated success stories to mask the fact that payouts to existing members come from the funds of new recruits.

2. Reliance on continuous recruitment

These schemes require a steady stream of new participants to sustain payouts. Existing investors are encouraged to recruit friends and family through referral incentives and multi‑level rewards. When recruitment dries up, often just a few months after launch, cash flow collapses and the vast majority of participants lose their entire investments.

3. Aggressive use of social networks

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Fraudsters exploit WhatsApp, Telegram and social media platforms to spread invitations and build community groups. They post false testimonials and screenshots of purported transactions to create a veneer of legitimacy. Viral messaging and peer pressure accelerate membership growth but also magnify the speed and scale of the eventual fallout.

4. Fabricated transaction records

To maintain trust, operators provide account statements and dashboard views that show regular, impressive profits. These records are entirely fictional, designed to discourage withdrawal requests. When investors eventually try to access their funds, they discover that the balance on their statements does not exist in reality.

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5. Exploitation of regulatory gaps

Many Ponzi schemes register as cooperative societies or frame themselves as tech startups offering peer‑to‑peer services. They take advantage of outdated laws and slow enforcement to operate unchecked for months or years. Regulators often lack the resources or clear legal authority to act swiftly, allowing fraudsters to extract billions before intervention.

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6. Strain on payment systems

Large volumes of deposits and attempted withdrawals place sudden pressure on banks and mobile money platforms. In response, financial institutions impose stricter transaction limits or freeze suspect accounts, which disrupts ordinary customers and damages confidence in digital payments. The ripple effects can slow national financial inclusion efforts.

The long‑term economic and psychological fallout of ponzi schemes

Beyond the immediate loss of funds, sometimes in the hundreds of billions of naira, victims suffer severe emotional distress and a lasting reluctance to invest. Communities that once pooled resources for collective ventures become wary of all group‑based financial schemes. Rebuilding trust requires sustained education, transparent enforcement and visible convictions of perpetrators.

These reminders highlight the critical need for careful vetting of any investment opportunity, stronger financial education at all levels and more agile regulatory responses. Only by addressing these vulnerabilities can Nigeria protect its citizens from future fraud and foster a more resilient financial environment.

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