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What Drives Tanzanians to Join Scam-proven Pyramid Schemes? 

Massive unemployment and the get-rich-quick dreams are named as some of the driving factors.

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Dar es Salaam. Massive unemployment problem, the desire to get rich easily and quickly as well as the growing behaviour among some Tanzanians to deliberately reject work and opt for quick solutions to fix their problems have been mentioned as some of the reasons that push many people into scam-laden pyramid schemes that usually leave them in tears.

According to a financial website Investopedia, a pyramid scheme is an illegal investment scam based on a hierarchical setup that pays members higher up in the structure with funds from new members.

While the government as well as other stakeholders that include lawmakers, religious leaders and even comedians have been urging members of the general population to be careful with the schemes, pointing out the financial and psychological effects associated with them, the number of schemes have not only been increasing in Tanzania but also they have not been unsuccessful at obtaining clients.

This is so despite the fact that pyramid schemes are said to be operating illegally in Tanzania as well as the presence of a number of cases in the East African nation’s courts where the scam related to the schemes have been exposed, with the owners of the schemes ordered to pay billions in damages to their former clients turned victims, see here, here and here.

The get-rich-quick dreams

“The flourishing of pyramid schemes in Tanzania has a lot to do with the get-rich-quick dreams that some Tanzanians have,” Capital Markets and Securities Authority (CMSA) Chief Executive Officer Nicodemus Mkama told The Chanzo during a recent interview. “People should be extra careful with advertisements that convince them to take part in any investment plan that promises huge profits within a very short period. That’s a scam.” 

The CMSA is a government agency under the Ministry for Finance and Planning that oversees the capital markets business in Tanzania. It regulates and supervises brokers, investment advisors, fund Managers, and custodians of Securities. CMSA has been very aggressive at warning people against joining pyramid schemes.

But some of those who once joined the schemes and ended up being scammed told The Chanzo during the course of doing this story that the get-rich-quick dreams and laziness pointed out by Mr Mkama are not the only factors that drive people into the schemes.

According to these people, many Tanzanians are forced to join the fraudulent schemes out of desperation for an activity that would earn them an income and allow them to survive in an environment characterized by a myriad of social and economic challenges. In other words, joining the schemes is a means of surviving. 

“I was personally driven to join pyramid schemes because I could not see any other job to do around me,” Martha Mwilongo, a business woman and resident of Sinza Africasana in Dar es Salaam and a former pyramid scheme client, told The Chanzo in an interview. “There are no jobs out here. People take these [schemes] then as a means with which to earn an income.”

According to President Samia Suluhu Hassan, during an address she gave in Mwanza where she was meeting with youths from across the country on June 15, 2021, 11.4 percent of Tanzania’s youthful population that’s in the working age do not have jobs, a situation that pushes many youths into precarious, and sometimes criminal, activities.

“[Pyramid schemes] are simply fraudulent projects,” added Ms Mwilongo with an emphasis. “Many people I know who joined the schemes are people who had no other option of earning income, including myself.” 

Others are just uninformed of the risks

But there is also the hope that one will use the money they earn through pyramid schemes to invest in other business projects as was the case with Ms Rachel Nzengo, a resident of Kijitonyama in Dar es Salaam who once invested in one of the city’s pyramid schemes. 

“I thought I could make some money and invest it somewhere else,” Nzengo says before ending up losing the money altogether. “I would say I was uninformed about the whole issue. But given the experience, I do not want to hear anything about the [pyramid] schemes again. In fact, if I have a contact on my phone which keeps sharing stuff like that with me I immediately delete the number without even a forewarning.” 

But according to people who run these businesses, the fraudulent nature of pyramid schemes are overrated. One of these people is Mr David Asiimwe, a spokesperson for the Alliance in Motion Global company, a Dar es Salaam-based company dealing with selling various products.

Asiimwe says fraud, a common criticism against pyramid schemes, is not the result of the nature of the business itself but rather an individual person’s behaviour. He tells The Chanzo in an interview: “Some businesses are just ruined by people. For example, the issue of cheating members of [a network marketing company]. It’s not the company that cheats. Its people.”

They may as well fall a government

Still, Mr Mkama of CMSA insists that pyramid schemes are fraudulent. Mentioning how Tanzania as a country is affected by these practices, Mr Mkama says that pyramid schemes allow people to move the money required to invest in production activities into schemes which do not have any economic values.

“They might as well cause rebellion against the government as many scammed people will be disillusioned by the apparent lack of a response from their leaders to deal with what they might consider as an injustice,” Mr Mkama says. “This is exactly what happened in [the southern European country of] Albania.”

In 1997, a civil war broke out in Albania. Most historians have suggested that the war was sparked by pyramid scheme failures soon after Albania’s transition to a market economy. The government was toppled and more than 2,000 people were killed. 

“People should do research or consult expert opinion on a particular business so as to learn its legality before taking the decision of investing in it,” Mr Mkama advises. “We should also nurture a culture of working and actively get involved in production activities like agriculture and businesses so as to earn a legal income.”

Lukelo Francis is The Chanzo journalist based in Dar es Salaam, Tanzania. He can be reached through If you have any questions about this story, you can contact our editors at

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