COTONOU: Sadiatou used to be a well-off trader of traditional cloth at the market in Benin’s economic hub of Cotonou, but now sells school equipment from the doorstep of her home.
In 2010 she sank more than 5 million CFA francs ($8,700) into an investment scheme that promised a quick profit.
“It’s a deposit I should never have made,” she told AFP. “My business took a hit and my health as well. I’ve been depressed for a long time.
“I was counting on the savings I’d make to expand my business. But it was useless. All my money has gone.”
Seven years after what was described as the biggest financial scandal in Benin’s history was revealed, 20 people this week went on trial.
Sadiatou is one of nearly 150,000 people that the International Monetary Fund (IMF) estimates were defrauded of more than 150 billion CFA francs in the Investment Consultancy and Computing Services (ICC Services) case.
Some estimates, however, say as many as 300,000 people were lured into parting with their hard-earned or borrowed cash and life-savings on the promise of 150 to 200 percent per quarter returns.
Despite repeated warnings about investing in so-called pyramid or Ponzi schemes, such scams are becoming commonplace throughout Africa.
Frank Engelsman, who heads the Amsterdam- and Paris-based Ultrascan, which specializes in detecting international financial fraud, says such schemes are booming.
“First, because the infrastructure in big cities of Africa is improving rapidly, both phone as well as Internet infrastructure — and that’s what these fraudsters need.
“Second, because in those cities... police are not trained to handle Internet international communication crimes that always cross a border between the fraudster and the victim.”
In Gabon, a business run by a Pentecostal church pastor, Yves David Mapakou, allegedly swindled up to 30,000 French and Gabonese clients by promising profits on investments.
A complaint was lodged in Paris in August last year.
Africa’s most populous nation Nigeria remains the undisputed champion of fraud, having assiduously developed “419” scams over the years — a reference to the relevant section of the criminal code.
Victims from around the world have been duped into handing over billions of dollars through a barrage of unsolicited e-mail appeals and job offers as well as promises of marriage.
Engelsman said this type of fraud has “spread from Nigeria to neighboring countries” in West Africa, taking advantage of the lack of capacity of law enforcement agencies to investigate.
“Like most bad things like crime, they tend to spread when not put to a halt, widen their scope to improve effect/income.” he added.
Development can even play a part.
“It’s easier when the infrastructure is good, in countries where also the chamber of commerce is registering companies easily and bank accounts are opened, based on one or more registrations,” he added.
The Ponzi scheme in Benin — likened to the one run by Bernie Madoff in the US that saw the financier jailed — involved paying initial investors with the money of new clients.
Textile worker Aline Aklassato said she had “no reason at all not to believe” the scheme would not work.
“Colleagues and friends had made deposits and received dividends,” she added.
“I got dividends myself for two months of 300,000 CFA francs before the difficulties started.”
Benin, a Ponzi scheme and a long wait for answers
Benin, a Ponzi scheme and a long wait for answers
US Vice President Vance heads to Armenia, Azerbaijan to push peace, trade
- Vance is promoting TRIPP, a proposed 43-km corridor across southern Armenia linking Azerbaijan to its Nakhchivan exclave and ally Turkiye
TBILISI: US Vice President JD Vance will visit Armenia and Azerbaijan this week to push a Washington-brokered peace agreement that could transform energy and trade routes in the strategic South Caucasus region.
His two-day trip to Armenia, which begins later on Monday, comes just six months after the Armenian and Azerbaijani leaders signed an agreement at the White House seen as the first step toward peace after nearly 40 years of war.
Vance, the first US vice president to visit Armenia, is seeking to advance the Trump Route for International Peace and Prosperity (TRIPP), a proposed 43-kilometer (27-mile) corridor that would run across southern Armenia and give Azerbaijan a direct route to its exclave of Nakhchivan and in turn to Turkiye, Baku’s close ally.
“Vance’s visit should serve to reaffirm the US’s commitment to seeing the Trump Route through,” said Joshua Kucera, a senior South Caucasus analyst at Crisis Group.
“In a region like the Caucasus, even a small amount of attention from the US can make a significant impact.”
The Armenian government said on Monday that Vance would hold talks with Prime Minister Nikol Pashinyan and that both men would then make statements, without elaborating.
Vance will then visit Azerbaijan on Wednesday and Thursday, the White House has said.
Under the agreement signed last year, a private US firm, the TRIPP Development Company, has been granted exclusive rights to develop the proposed corridor, with Yerevan retaining full sovereignty over its borders, customs, taxation and security. The route would better connect Asia to Europe while — crucially for Washington — bypassing Russia and Iran at a time when Western countries are keen on diversifying energy and trade routes away from Russia due to its war in Ukraine. Russia has traditionally viewed the South Caucasus as part of its sphere of influence but has seen its clout there diminish as it is distracted by the war in Ukraine. Securing US access to supplies of critical minerals is also likely to be a key focus of Vance’s visit. TRIPP could prove a key transit corridor for the vast mineral wealth of Central Asia — including uranium, copper, gold and rare earths — to Western markets.
CLOSED BORDERS, BITTER RIVALS
In Soviet times the South Caucasus was criss-crossed by railways and oil pipelines until a series of wars beginning in the 1980s disrupted energy routes and shuttered the border between Armenia and Turkiye, Azerbaijan’s key regional ally.
Armenia and Azerbaijan were locked in bitter conflict for nearly four decades, primarily over the mountainous region of Nagorno-Karabakh, an internationally recognized part of Azerbaijan that broke away from Baku’s control as the Soviet Union fell apart in 1991.
Azerbaijan and Armenia fought two wars over Karabakh before Baku finally took it back in 2023. Karabakh’s entire ethnic Armenian population of around 100,000 people fled to Armenia. The two neighbors have made progress in recent months on normalizing relations, including restarting some energy shipments.
But major hurdles remain to full and lasting peace, including a demand by Azerbaijan that Armenia change its constitution to remove what Baku says contains implicit claims on Azerbaijani territory.
