PYRAM ALERT: Bank of Ghana must act now!

Since the days of Adam, human beings have found creative ways to make themselves better off at the expense of others.

Adam Smith, the famous economist encapsulated in his wealth of nations book- “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”

As humans, our self-interest and desire to achieve riches leave us gullible and exposed to others who may want to take advantage.

It is not surprising to see people being misled and duped to surrender the little they have to fraudsters and criminals, with the hope of getting so much in return. In advanced countries, where general belief holds that majority of the populace is enlightened; they are not spared by the famous “GET RICH QUICK PYRAM” scheme.

A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public ( Wikipedia)

PYRAM Schemes take various forms in different countries. But there is a general characteristic of all these schemes.

A successful pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding money-making formula which is used for profit. The essential idea is that a “con artist” Mr. X, makes only one payment. To start earning, Mr. X has to recruit others like him who will also make one payment each. Mr. X gets paid out of receipts from those new recruits. They then go on to recruit others. As each new recruit makes a payment, Mr. X gets a cut. He is thus promised exponential benefits as the “business” expands.

Such “businesses” seldom involve sales of real products or services to which a monetary value might be easily attached. However, sometimes the “payment” itself may be a non-cash valuable. To enhance credibility, most such scams are well equipped with fake referrals, testimonials, and information.

The flaw is that there is no end benefit. The money simply travels up the chain. Only the originator (sometimes called the “pharaoh”) and a very few at the top levels of the pyramid make significant amounts of money. The amounts dwindle steeply down the pyramid slopes. Individuals at the bottom of the pyramid (those who subscribed to the plan, but were not able to recruit any followers themselves) end up with a deficit. (Wikipedia)

Ghana has suffered its share of these schemes in the 1980s and 1990s. Most of the schemes sought to enroll people to deposit monies with the hope of receiving huge interest rates. Quite surprisingly, it re – emerges in different ways and the ongoing Onward Investment scandal reiterates its remarkability to keep coming back.

I worked quite close to Onward Investment Company and made an effort to advise any known face who I’d see climb the “Onward Pyramid” to be very cautious in their dealings with that company. It was a scam that was allowed to be perpetrated on the marginalized in society. In the end, when Bank of Ghana intervened, the harm had already been caused. Millions of money had gone down the drain – or “up the pyramid”.

But the new craze bears semblance to the Onward Company one. Just that this time, it has moved from commercial and business districts to residential areas. Driving around Kumasi, you would see a poster with a phoney name “Money group”, “Self Help Association” or “Yonko Do Group”.

The concept and basic model is to enroll young people as many as possible into an association, take regular deposits from them and pay them with “non- cash valuables”, of cars and lands, furniture and household items, when they are getting married.

From afar it looks good, but that’s how exactly all these schemes are supposed to be – look good and appeal to people, reduce suspicions and gain confidence of the participants in order to get as many referrals and members.

Fortunately for us, this particular scheme is still in its early stage and the regulator needs to clamp down on it before it goes viral and leave participants worse off.

The Bank of Ghana must act now!

The writer can be reached at


About appsam

Jack of all trades! Hoping to be MASTER of ALL
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