January 22, 2017

Ponzi shemes: Change of attitude is solution to challenge, SEC DG says



Abuja – Mr Mounir Gwazo, Director-General, Securities and Exchange Commission (SEC), said that the solution to ponzi schemes in the country was a change of attitude.

Gwarzo told the News Agency of Nigeria (NAN) in Abuja that for Ponzi schemes to be eradicated, Nigerians must stop being greedy.

“The fundamental solution to this Ponzi scheme has to do with our own attitude as people.

“We must be able to shun being greedy; we must try as much as possible to look at some of these schemes very critically.

“Are these schemes registered either by the Central Bank of Nigeria or by the Securities and Exchange Commission; if they are not then you know clearly that there are issues.“

What sort of incentives are they offering; what sort of returns are they promising; most of them promise returns that are not reasonable, that are not realistic, that cannot stand the test of time.

“ Those kind of things should send a very strong signal to say that there is more to it than the eyes can see,’’ he said.

Gwarzo explained that the regulators were doing their best to warn Nigerians against partaking in Ponzi schemes such as MMM and the recent digital scheme called the Bitcoin.

He urged Nigerians to avoid such schemes, adding that,“ we should discipline our mind from being very greedy, to being very realistic in whatever investment outlet we put our money in.

On the challenges of the capital market in 2016, the SEC boss said it was mainly due to the general crisis faced by the nation’s economy.

“Because like we all know the market also went down and the market is a reflection of the economy, we all know that the economy was going through difficult times.

“This current government is doing all it can to salvage the situation.

“One can clearly see the major challenge that the government had faced and for me, any other government, given the circumstances at that time, could have been in that situation.

“Because we experienced a situation whereby oil price was below 30 dollars per barrel, we experienced a situation whereby production of crude oil at one point was even as low as 950,000 barrels.

“Investors confidence is very key in any capital market; companies having access to foreign exchange for their importation is very key; also having access to liquidity from banks is very important.

“Therefore, 2016 was a very challenging year based on these variables, so that is why the market was very tough. Our income went down by 43 per cent.

Gwarzo explained that the challenges faced in the capital market were not restricted to Nigeria as other countries also faced one form of challenge or the other.

He said,“ other markets also experienced the same thing; China went down by as high as almost 60 per cent; South Africa also went down by about 32 per cent.

“Malaysia also had dropped largely. So, for those countries, worldwide, there was also a huge decline on commodity prices and that affected their income.

“So, the capital market went through difficult times and we at SEC also experienced very difficult situation in terms of our income.

“ The Securities and Exchange Commission of Nigeria relies heavily or totally on market for its own funding and unlike what is obtainable