The MenzGold Issue: Greed or Ignorance?
The media has started discussions from where they left off last year. The MenzGold issue has dominated the media in the New Year. With several issues of similar cases in the past, is it greed or ignorance that continues to compel people into this loss? Did the government play any role in influencing people to save there? Should the government intervene and protect the monies of the public by paying them their losses? Truth be told, there are more questions to ask than can be answered. I do not intend to be left out in this discussion since it dominated last week’s papers and may continue this week.
In the 1990’s was Pyram Loans and Savings Company located at Accra New Town. The company did well to convince the public to invest there with a monthly interest of 30%. It turned out to be a scam and the boss was arrested. Fast forward to October 2014, the Unique Shepherd Group of Companies, popularly known as US Tilapia had its boss arrested for failing to deliver his promise of handsome returns to investors. In 2016, there was the DKM saga. This turned a lot of people in and around the then Brong Ahafo Region into victims of financial scam.
History is indeed important to be studied. Greed and ignorance play a key role in getting people duped. “If something is too good to be true, it probably is”. One would be justified by saying greed is the cause, when you look at the amount of money people invest in these businesses. People who invest that large sum of money are seen to be rich and so, why would you take a short cut to double your riches? Nonetheless, I do not think everyone who invested in the MenzGold business is greedy. It might be that they just thought it was a good investment to make in a suffering economy hence, they failed to do due diligence. MenzGold promised 7% to 10% monthly interest on gold collectibles deposited by their clients. They succeeded in attracting more customers in spite of several warnings from regulators prompting the public not to do business with the company. Ignorance should also be looked at. In most cases, the investor does not know the approved interest rate from the Bank of Ghana (BoG) to be able to deduce that, what is being offered somewhere else is too good to be true. However, it is also the responsibility of every citizen to do due diligence before taking part in any business in the country. That is what most investors fail to do before making any investment. Interestingly, Ghanaians living overseas, small-scale miners, bankers, top security officers amongst others form a recognizable percentage of their (MenzGold) customers.
Obviously, and as already stated, greed is not the only thing that gets people paying attention to financial scammers, ignorance and economic hardship also play crucial roles. Points have been raised concerning the president’s photograph with the C.E.O of MenzGold as being advertising enough for the company. I stand to be corrected, but I think if proper check was done by the president’s team, they would not have allowed that. This is because, the company had received several warnings from the BoG which was besmirching its integrity. A pose with the president of the country means respect, trust and patriotism. And so yes, that could have influenced the decisions of some investors. However, the company was in existence in 2014 as Menzbank, 2015 as Menzbanc and subsequently MenzGold. The metamorphosis occurred as a result of the BoG’s continuous warning to the firm and the general public not to do business with the company. But still people continued to invest with the company, therefore, people were already in business with the company before the president’s photograph with the company’s boss.
There are arguments that since the president used tax payers’ monies to pay the DKM victims (which I was strongly against), he should have no problem doing same for the MenzGold customers. Hope you remember the saying “two wrongs do not make a right”? If it was not right paying the victims of the DKM fiasco, it will not be right to pay the victims of the MenzGold saga. Now let us consider this, if the government decides to pay, it will take a lot from the nation’s kitty and will hurt the economy. The government will then struggle for funds to relax the economic hardship citizens are already facing. Subsequently, it will reflect in next year’s electoral results. Similarly, if the government decides not to pay, victims will suffer and criticize the government. No doubt, it will have an impact on election 2020 results. Nothing really changes for the government does it?
Well, studying politics, I have come to understand that governments will always take decisions having the next election in mind. With this, government will take into accounts what the views of the larger population is, before coming out with an official statement (only if necessary). All that said, I think government will avoid an official statement (for now) just to play it safe. At the same time, government will do well to ensure that the investigation that has started will continue until justice prevails.
posted by Adu Patrick.
Your comments are welcome.