Business
National Assembly Introduces Jail Terms For Ponzi Scheme Promoters
The Investment and Securities Bill, which might result in jail time for people who advocate Ponzi schemes in Nigeria has been passed by the National Assembly.
The Investment and Securities Service Bill 2023 finally scaled through the final hurdle of the National Assembly when the Senate passed it on March 29.
The bill, which is expected to aid the functioning of the capital market and facilitate the ongoing economic diversification in the country, had been passed by the House of Representatives in December. It is only awaiting presidential assent to become law.
At the plenary, the Senate President, Ahmad Lawan, stated that the bill is expected to protect investors, adequately regulate the market, reduce systemic risks as well as provide for more stringent punishment for operators of Ponzi schemes.
He said, “The bill for an act to repeal the Investments and Securities Act 2007 Act No. 29 2007 and enact the Investments and Securities Bill 2023 to service the SEC as the apex regulatory authority for the Nigerian capital market as well as regulation of the market to ensure capital formation, to protect investors, maintain fair, efficient and transparent market and reduction of systemic risk and for related matters is hereby passed.”
Speaking as of the time the House of Representatives passed the bill, the Chairman of the House Committee on Capital Markets and Institutions, Babangida Ibrahim, stated that the ISB 2023 was capable of transforming the capital market, attracting foreign investors as well as boosting investors’ confidence, among others.
Ibrahim said, “The bill seeks to repeal the existing Investments and Securities Act 2007 and to establish a new market infrastructure and wide-ranging system of regulation of investments and securities businesses in Nigeria, especially in the areas of derivatives, systematic risk management, financial market infrastructure and Ponzi scheme and platforms.”
One of the developments that the new bill brings is the prohibition of Ponzi/Pyramid schemes, which have led to the loss of billions of naira on the part of victims and also affected confidence in the investment climate in Nigeria.
The passed bill prohibits Ponzi/pyramid schemes as well as other illegal investment schemes and prescribes a jail term of not less than 10 years for promoters of such schemes.
Ponzi schemes, also known as pyramid sales schemes, are a money laundering system where investors are lured in with the promise of high returns on investment after a specified period.
The system runs in a somewhat cyclic fashion by paying old investors with deposits of new investors. Usually, this cycle becomes unsustainable when the backlog of old investors eligible for payments exceeds the investments coming into the system.
According to Nigeria’s Securities and Exchange Commission, three million Nigerians lost N18bn when the popular Ponzi scheme, Mavrodi Mundial Movement aka MMM, crashed in 2016. As of 2022, Nigerians have lost over N300bn in Ponzi schemes in five years, according to a report generated by the Norrenberger Financial Investments scheme.
The promoters of a popular investment scheme, Ovaioza Farm Produce Storage Business Limited, are facing prosecution for luring members of the public to an unregistered collective investment scheme. The promoters, Imu Yunusa and Goodness Omeiza have been accused of defrauding their victims up to N2bn.
Reacting to the introduction of the prohibition of Ponzi schemes, Chief Executive Officer of Enterprise Stockbrokers, Mr Rotimi Fakayejo, said that the move was long overdue and a welcome idea.
He said, “I remember very well, this Ponzi scheme that got a lot of people in trouble, MMM. In the end, it is not just about people losing money. It is the disinterestedness in investing. First, they invested in the wrong window and ultimately, they will not invest again.
“Some foolishly and gullibly invested in it and some because of ignorance entered into it and others because of greed. Those who entered into it because of greed know what they were doing, they are just greedy. But the ones who get into it ignorantly, not knowing that such schemes are not authorised by the SEC are the ones who may never enter into any viable or regulated investment window again. Every economy needs investment, for money to be revolving through profitable channels.”
Fakayejo also argued that both those who get involved in Ponzi schemes and their promoters should be punished, albeit, the sanctions would be different.
He said, “The person who goes into it should get a small punishment and the person that starts the scheme should get a huge penalty. For anything, you are supposed to make findings.”
Regarding the proposed jail term of not less than 10 years, Fakayejo stated that the inclusion of asset forfeiture and also a fine of 10-20 per cent of the amount of money collected from victims may not be a bad idea.
Expressing a divergent opinion on the Ponzi scheme prohibition, the National Chairman of the Progressives Shareholders Association of Nigeria, Boniface Okezie, stated that Ponzi schemes have been embraced in other places.
“The Ponzi scheme has worked elsewhere; people have embraced it but the Nigerian market has not embraced it and SEC said that it is not known to them and that it is a scam and so they cannot allow Nigerians to patronize it.”
Okezie also accused the National Assembly of copying foreign laws that may have little or no impact on the Nigerian scene and doubted that the President, Major General Muhammadu Buhari (retd) would sign the bill before the expiration of his tenure next month.
The PSAN boss said, “I do not think the outgoing president will assent to that bill before he leaves office on May 29 because previous bills sent to him, it took him time to assent, not to talk of now that he is going for retirement.”
Speaking on some highlights of the bill in a statement released after the Senate passed the bill, the Director-General of the Securities and Exchange Commission, Lamido Yuguda, said that a recommendation was made in the bill for the inclusion of the National Pension Commission on the SEC board for increased collaboration between the two agencies, particularly to encourage greater investment of pension funds and in capital market products/instruments.
This is a welcome development, according to stakeholders, given the visible role that pension funds play in the capital market already.
Capital market operator, Fakayejo, said that Pencom having a seat on the board of SEC was long overdue.
He said, “The pension funds have been a major investor in the capital market. Look at all the major instruments, either bonds or equities, commercial papers, at the different classes of bonds, whichever way you want to look at it, the pension funds are the largest investors. So, I believe they should have a say in how the market is being regulated.”
Okezie also agreed, saying that the pension funds had been a major player in the capital market.
He said, “The Pension Fund has contributed to a large extent to what are seeing today of the rallying in the capital market. If they are investing in the SEC-regulated market, they should be mindful of where they invest their money so that their money does not get trapped when they need to pay those retirees.”
Commenting on the bill being able to boost investors’ confidence and attract foreign investments like the Chairman of the House Committee on Capital Markets and Institutions, had boasted, Fakayejo, pointed out that the reasons foreign investors left and are leaving are still very much around.
He said the unstable exchange rate was a major deterrent for foreign investors.
“I don’t see anything in the bill that is a plus for foreign portfolio investment. You and I know that the reason they are not here or why they have taken away their money is the instability of the naira. That has been the basic reason they (FPIs) are not here.”
Professor Olawale Ajai of the Lagos Business School also agreed that the country’s business environment has not been investment-friendly.
Ajai said, “Insecurity and the opaque naira foreign exchange regime have not helped in recent times, in spite of strenuous efforts on ‘doing business reforms.’”
Others highlights of the bill include the expansion of the categories of issuers as a key step towards the introduction of innovations and offerings such as crowd-funding as well as the facilitation of “commercial and investment business activities”, subject to the approval of the commission and other stipulated controls.
The bill also expands the definition of a Collective Investment Scheme to include schemes offered privately to qualified investors, and contains an entirely new part which regulates Commodity Exchanges and Warehouse Receipts.
The SEC DG said that the new parts of the bill “are essential for developing the entire gamut of the Commodities ecosystem”.
According to him, a new part on the management of systemic risk has been introduced, covering the following themes: monitoring, management and mitigation of systemic risk in the Nigerian capital market; arrangements with other regulators relating to information required from entities that are regulated by other regulators; sharing of information between financial sector regulatory authorities or government agencies; and use of a legal entity identifier to provide for proper monitoring of systemic risks.
The proposed legislation categorizes Securities Exchanges as either composite or non-composite exchanges. A composite exchange allows for the listing and trading of all types of securities and products, whereas a non-composite exchange specializes in a single type of security or product.
Additionally, the bill expands the responsibilities of exchanges and outlines clear guidelines for revoking registration. It also introduces new provisions regarding Financial Market Infrastructures, such as Central Counter Parties, Clearing Houses, and Trade Depositories.
Business
Group Credits PINL with Safeguarding Environment, Farms
A group has given kudos to the Pipeline Infrastructure Nigeria Limited (PINL) for effective pipeline surveillance and community interventions during the recent flooding in parts of the Niger Delta.
The Niger Delta Progressive Alliance (NDPA) in a statement signed by its Convener, Nse Victor Udoh, noted that the PINL’s operational efficiency and sustained maintenance of pipeline corridors helped prevent additional environmental damage, preserve farmlands and protect aquatic ecosystems from threats associated with pipeline failures and oil spills.
According to the NDPA, annual flooding in the Niger Delta poses serious environmental risks, particularly when floodwaters come into contact with damaged pipelines, oil spills and illegal activities around oil and gas infrastructure.
The organisation noted that the recent flood season was different, as there were no reported cases of widespread oil contamination of floodwaters, dead fish or the spread of oil into farms and residential areas attributable to pipeline failures.
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It said the development underscored the importance of preventive pipeline management, stressing that effective infrastructure protection was often measured by disasters that were prevented rather than emergencies that attracted public attention.
According to the group, regular patrols, monitoring and right-of-way surveillance enabled PINL to identify and address potential threats before they escalated into major incidents.
It added that inspection, maintenance and repair activities had also contributed to maintaining the integrity of critical pipelines, especially during periods of heavy rainfall and flooding.
The NDPA further commended PINL for its interventions in flood-affected communities in Rivers, Bayelsa and Imo States.
It cited the company’s restoration efforts in areas previously affected by illegal refining, as well as empowerment programmes targeting women and youths in host communities.
Udoh said the initiatives showed that corporate social responsibility should go beyond occasional charitable gestures and become part of a sustained commitment to community welfare and development.
“We commend Pipeline Infrastructure Nigeria Limited, therefore, on two counts that this season has made inseparable: the efficiency of its service, tested by a flood and found equal to it, and the seriousness of its social responsibility,” he said.
He added that the group had observed that farms remained protected and waterways retained their ecological value despite the flooding.
“This season, our farms still stand where the water reached them. Our creeks still hold their life,” Udoh said.
The alliance maintained that infrastructure security and community welfare were closely linked in the Niger Delta, where pipelines pass through several communities and environmentally sensitive areas.
It urged PINL to sustain the standard, stressing that protection of critical national infrastructure, environmental preservation and improved host-community welfare should remain mutually reinforcing objectives.
The NDPA described PINL’s performance during the flood season as an example of how operational efficiency and responsible community engagement could combine to protect energy infrastructure and the environment.
Business
Dangote Threatens Petrol Importers’ Supply Over Product Blending
As concerns continue to mount over product quality and allegations of blending of imported fuel with products refined locally against major oil marketers, the Dangote Petroleum Refinery and Petrochemicals (DPRP), is contemplating cutting off supplies to the culprits.
The proposed measure could take effect as early as this week, subject to further consultations and any last-minute intervention, according to sources familiar with the situation.
The grave concern is that some marketers are allegedly blending imported Premium Motor Spirit (PMS), also called petrol, with petrol purchased from the DPRP before distributing the resulting product in the market.
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This has left the refinery concerned that such practices could make it difficult to distinguish between products it supplied and the products subsequently blended or handled by third parties.
“It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be mixed with imported products of uncertain quality and the resulting product to be associated with the refinery,” a senior official at the $20bn Lekki-based plant, who spoke in confidence due to the lack of authorisation to speak on the matter, stated.
The refinery has also raised concerns about what it called a lack of a standard laboratory and adequate quality-control infrastructure for imported petroleum products, particularly the capacity to independently verify and certify the specifications of products entering the Nigerian market.
The latest development comes barely days after the DPRP warned that rising petrol imports were forcing it to export excess stocks despite having sufficient capacity to meet Nigeria’s domestic demand.
The refinery said imported PMS accounted for approximately 43 percent of fuel supplied into the Nigerian market in July, saying the continued issuance of petrol import licences had created uncertainty over domestic demand and made production and inventory planning increasingly difficult.
The DPRP said it had consistently maintained sufficient inventory and reserved product volumes to guarantee steady supply to the Nigerian market, but argued that keeping large stocks indefinitely was becoming commercially unsustainable when it could not determine how much imported petrol would enter the country.
“As a responsible energy provider, we have always endeavoured to keep adequate reserves to satisfy local demand at all times. However, in an environment where significant volumes of imported PMS continue to enter the market through licences issued by the regulator, and where there is limited visibility on future import volumes, it becomes commercially unsustainable to continue holding excess inventory indefinitely.”
The refinery said the surplus petrol that could not be absorbed by the domestic market would consequently have to be exported to regional and international markets.
The proposed restriction on sales to importing marketers now adds a new dimension to the refinery’s concerns, as Dangote moves from highlighting the commercial impact of rising imports to considering measures that would prevent marketers from sourcing its petrol while simultaneously importing competing products.
Business
Nigeria Beats 2026 Foreign Reserves Target, Hits $53.1b
Nigeria’s economic fortune is benefiting from the Middle East crisis, as the impact of capital inflows from stronger crude oil earnings has seen her foreign reserves climb to record $53.1 billion, beating the $51.04 billion year-end target.
Data available on the Central Bank of Nigeria’s (CBN) website indicated that the reserves closed at $53.1 billion on August 24, which is the highest level in almost 18 years.
Any analyses of the growth shows that the difference in reserves position places the Nigerian economy in good stead, because it can cover over 12 months import.
It is noteworthy that Nigeria’s external reserves fuel the CBN’s capacity to support the local currency and meet external obligations, have continued to rise steadily, since the face-off between the United States and Iran.
Further analysis of the data displayed by the CBN showed that the liquid portion of the external reserves stood at $52.5 billion.
Biztellers reports that Brent crude traded around $87 per barrel, within the week, well above Nigeria’s 2026 federal budget benchmark of $64.85.
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With the Middle East crisis not showing signs of abating, analysts believe the price rebound would largely bolster Nigeria’s fiscal revenues.
The line of thought is popular among those who know, because as a crude oil exporter, Nigeria will continue to earn more petrodollars, which they argue would support the domestic currency – naira’s stability, while pumping the volume of external reserves.
In its economic projections for 2026, the CBN targeted stronger oil earnings, foreign exchange market reforms and improved external capital inflows to achieve the year-end reserves projection.
According to analysts, the current reserves position reinforces the steady growth in Nigeria’s external buffers.
The founder/Chief Executive Officer of the Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, earlier hinted at a positive outlook for Nigeria’s external reserves as he does not see anything derailing the forex and fiscal reforms that have brought about stability and improvement in external reserves, as reported by The Nation.
Yusuf said: “Well, the outlook for me is positive because I don’t see anything derailing these forex reforms, fuel subsidy etc. It is these reforms that have brought about stability.”
The CBN data further showed that Nigeria’s external reserves have maintained a steady upward surge in recent months.
The reserves started June at $49.80 billion and crossed the $50 billion mark by June 5, reaching $50.12 billion.
On June 15, reserves had increased further to $50.81 billion before rising to the current position. The reserves stood at $51.9 billion on July 31, and continued.
The sustained increase reflects stronger foreign exchange inflows and improved liquidity conditions in the country’s external sector.
The CBN Governor, Olayemi Cardoso, said: “This strong buffer continues to reinforce investor confidence in the Nigerian economy and support exchange rate stability.”
The CBN’s decision to clear over $7 billion unsettled FX backlogs raised investors’ confidence in the economy, supporting dollar inflows and foreign reserves accretion, Cardoso added.
The CBN boss had explained that although he had no idea where the fund for the backlog clearance would come from, when he assumed office, he believed it was the right thing to do, and gave investors his word.
He said: “Credibility is at the heart of any central bank. If you don’t have credibility, people do not trust you and they do not invest in your economy. When I took office, I made a promise we would pay the backlog, the verifiable backlog of monies that were owed by Nigeria to third parties.
“And it was, at the time, estimated at over $7 billion US dollars. And to be honest with you, I had no idea how I was going to do it, but I just felt it was not something to be negotiated.”
Cardoso explained that Nigeria needed to ensure that its integrity is maintained. Analysts believe the higher reserve level could enhance the CBN’s capacity to support exchange rate stability and meet external obligations.





