GOVERNMENT’S gross mismanagement of the economy has thrown most Zimbabweans to the deep end of poverty and exposed them to all sorts of vices, including ponzi schemes, which promise them instant riches, but leave them much poorer.
If anything, the latest ponzi scheme pulled by E-Creator which prejudiced citizens of over US$1 million just shows how much Zimbabweans are struggling and desperate to make ends meet.
A ponzi scheme is an investment fraud that pays existing investors with money collected from new investors.
Ponzi scheme organisers often promise to invest the money and generate high returns with little or no risk.
But in many ponzi schemes, the fraudsters do not invest the money, leaving their clients counting losses.
Yesterday, E-creator “employees” woke up to news that the company had closed after its founder Zhao Jiaotong vanished with US$1 million of their investment.
Prior to the big bang, signs that E-Creator was readying for a heist were abundantly clear. Its employees were failing to withdraw funds. Reasons proferred for this setback by the company didn't require a rocket scientist to tell that investors had been taken for a ride.
“The reason for the delay in withdrawal is that E-Creator has obtained the E-Creator Merchant ACC of EcoCash, so it needs to be connected with EcoCash,” a notice read.
- Govt’s bad economic policies expose citizens to ponzi schemes
- Ponzi scheme founder flees with ‘investors’ US$1m
- Being scammed is a psychological normalcy
- Police arrest E-Creator ‘director’
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The notice clearly didn't make sense. There is no way that an EcoCash merchant account would not be connected to EcoCash.
This is not the first time Zimbabweans have fallen prey to ponzi schemes. In 2021, police reported that 10 000 Zimbabweans lost a total of US$30 million after investing large sums of money in pyramid schemes.
Zimbabwe is battling runaway inflation at the back of high levels of unemployment, plunging citizens into abject poverty.
According to the Zimbabwe National Statistic Agency 2023 first quarter labour survey report, at least 2,8 million people of working age are unemployed. The national unemployment (expanded) rate stood at 46,7%.
The majority of workers are earning paltry salaries which are instantly eroded by hyperinflation.
This economic environment has left citizens vulnerable to exploitation by scammers as they desperately search for extra income.
In May, American economist Steve Hanke’s 2022 Misery Index adjudged Zimbabwe as the most miserable country because of a high cost of living.
The World Bank ranked Zimbabwe as having the world’s third highest food price inflation at 102%.
To prevent citizens from falling prey to con artists, government should provide an environment that is conducive to employment creation because without genuine sources of income people resort to taking risks.
