By Bokang Moeko
“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas,” American economist Paul Samuelson said.
What this means is that there is no such thing as a quick buck when it comes to investing your money. If someone promises you unbelievable returns– between 30 percent and 40 percent like MMM does – of your original investment returns back within a very short period of time chances are that this is too good to be true.
The news that MMM SA members stand to lose thousands of rands after accounts were frozen and the mavros points system was reset due to a lack of money entering the alleged pyramid scheme, did not come as a surprise at all. (Recall thatone of MMM offerings, MMM Republic of Bitcoin, shut down in April after failing to give a promised 100 percent return on investment.)
According to fin24, MMM SA told members: “We have to declare a restart and start all over again. We have no choice”
But, guess what, anonymous leaders of the South African wing of the Russian alleged pyramid scheme blamed media panic for the reboot on April 30, this was stated by fin24.
Remember, in a pyramid scheme, the only way you can get to the top is if you are continuously growing the base, by recruiting, it is the volume of growth that keeps the money going up the pyramid. Truth be told: eventually, it gets to a point where the money requirement is exponential, but now it outgrows itself. The number of people entering the system is just not enough to keep the structure alive and that’s when it collapses.
If you put two and two together you will come up with – that time might have arrived for MMM. Media then has nothing to do with the reboot.
“We will quickly pay off the “old” mavro debts, no doubt about it. You just have to wait,” MMM SA said to its members.
Fin24 has already voiced its concern saying the same message was given by another alleged SA pyramid scheme Kipi, which last paid out “dreams” to its members in 2015. The system is very similar to MMM, but instead of “donations” it uses “dreams”.
The aftermath of MMM’s collapse will be devastating. People were really excited about it. One lady, someone I know, in particular stands out: she was selling her site in order to invest. Her neighbours, early adopters, have benefited greatly from joining MMM. So she hoped MMM would be her one-way ticket to success.
I then fully comprehended whatCity Press consumer finance Maya Fisher-French meant when she said those living in poverty have more to lose.
“They are putting in money they can ill afford to lose in the first place,” she said.
“I wouldn’t be surprised if those people that are putting money in have borrowed that money. They’ve gone to micro lenders to borrow this money and put it in…and that is going to compound the problem,” she said.
But,until now, “firm believers” still don’t believe it might be over. They are vainly hoping things will be better. One of such is the user who said, “Please recruit, recruit, recruit and ph(provide help), ph, ph, to help the system recover quickly.”
Basically, this is a line that reveals the potential Ponzi scheme (in a Ponzi scheme, members must recruit new investors) nature of MMM. And strengthens my resolve that people should stay away from it.
“There is no investment that can promise 15 percent or 30 percent returns without risk” – Karen Muller, Sanlaam.
So, next time, I hope we as Basotho will be very careful when we invest. Bearing in mind that, in investment, the higher the returns on investment the higher the risk. Simply put: when you invest in assets that potentially have a higher return there is always a risk-return trade off.
Remember: before you invest in any company do some research on it to find if it is a reputable company – a company you can trust with your precious hard-earned money; and, if something is too good to be true, it probably is; finally, mouthful by mouthful, we eat an elephant – that is how investing should be like.
LEC to switch off households over debts
MASERU – The Lesotho Electricity Company (LEC) will from Tuesday next week begin switching off clients who owe it money.
The LEC issued a seven-day ultimatum to all customers who owe it on Tuesday last week. The deadline ends on Monday.
It is expected that the LEC will begin switching off households that have defaulted.
The state-owned power company, however, is not going to touch any government department or business entities that owe it on grounds that they are in payment negotiations.
The LEC move comes barely two weeks after it cut electricity supplies to the Water and Sewerage Company (WASCO) thus causing it to fail to pump water to communities countrywide for more than two days.
The LEC says it is owed close to M200 million by government departments, businesses and individuals.
The LEC spokesman, Tšepang Ledia, told thepost that the government and the businesses will not have their electricity cut because they are in negotiations.
“We are in negotiations with the government and businesses and hopefully they will pay,” Ledia said.
“We advise the ordinary people to pay their debts before the 20th of March 2023 or else we cut the services,” he said.
The LEC says it is running short of funds for its daily operations.
In December last year the company increased power tariffs by 7.9 percent on both energy and maximum demand charges across all customer categories for the Financial Year 2022/23.
Last week the LEC boss, Mohato Seleke, said postpaid consumers and sundry debtors owe the company M169.4 million.
He said unless the debtors pay he will be unable to buy electricity from ’Muela Hydropower Project, Eskom in South Africa and Mozambique’s EDM.
This, he said, could cause serious load shedding in the country and could be devastating for businesses.
Seleke said the LEC spends M630 million monthly to buy electricity.
“If postpaid consumers do not settle their debts this could prevent the LEC from being able to buy electricity which can lead the country to encounter load-shedding,” Seleke said.
Seleke said collecting debt from government department ministries was a challenge as there is an understanding that since LEC is a state-owned company, it will continue supplying government agencies with electricity and they will settle their bills when they have funds to do so.
Seleke said the LEC has lost M21 million to vandalism during this financial year.
Bumper payout for former mineworkers
MASERU – AT least 11 316 current as well as former mine workers are set for a bumper payout after Tshiamiso Trust began disbursing the first billion Maloti to workers who are suffering from silicosis and tuberculosis.
The payment comes two years after Tshiamiso Trust began processing claims for the historical M5 billion settlement agreement between mineworkers and six gold mines in South Africa.
Speaking at the payment announcement in Maseru last week, the Trust’s CEO, Lusanda Jiya, said it has been two years since they officially began accepting claims.
“Our people come to work every day with the mission of impacting lives for the better, and the first billion rand paid out to over 11 000 families is just the beginning,” Jiya said.
“We know that there is no compensation that will ever be enough to undo the suffering endured by mine workers and their families,” he said.
“However, we are committed to deliver our mandate and ensure that every family that is eligible for compensation receives it.”
Jiya said the Trust is limited both in terms of the time in which they can operate, and the extent to which they can assist those seeking compensation.
Broadly speaking, the eligibility criteria include among others that the mineworker must have worked at one of the qualifying gold mines between March 12, 1965 and December 10, 2019.
Secondly, living mineworkers must have permanent lung damage from silicosis or TB and deceased mine workers representatives must have evidence that proves that they (the deceased) died from TB or Silicosis.
Tshiamiso Trust has a lifespan of 12 years, ending in February 2031.
Over 111 000 claims have been received to date, through offices in South Africa, Lesotho, Botswana, eSwatini, and Mozambique.
The Trust is working with stakeholders in these countries and others to mobilise its efforts and expand operations.
The history of silicosis in South Africa goes back to the late 1880’s when the first gold mines began operations.
The gold was stored and locked in quartz, a special rock that contains large amounts of silica.
Crystallised silica particles can cause serious respiratory damage if inhaled.
In the earlier days of gold mining, dust control, health and safety standards and the use of PPE (personal protective equipment) were not as advanced as they are today.
Tshiamiso Trust was established in 2020 to give effect to the settlement agreement reached between six mining companies.
The companies are African Rainbow Minerals, Anglo American South Africa, AngloGold Ashanti, Harmony Gold, Sibanye Stillwater and Gold Fields.
The settlement agreement was reached and made after a ruling by the Johannesburg High Court as a result of a historic class action by former and current mineworkers against the six gold mines.
Justice for Miners is a coalition of interested parties in the mining sector launched at the Nelson Mandela Foundation in Johannesburg in 2020.
The Johannesburg High Court approved the setting up of the Tshiamiso Trust to facilitate payment by the companies to affected miners.
Farmers cry over cost of livestock feed
MASERU – Lehlohonolo Mokhethi is a farmer who has been running a successful poultry business, thanks to a small loan he got from a local bank.
He now has 300 chickens.
He says his vision is to rear 5 000 chickens by 2025 and employ 30 youths. But he is now grappling with a new challenge: the ever increasing cost of chicken feed.
That is threatening the viability of his business.
“The biggest challenge is that food prices increase every day, feeding is expensive,” Mokhethi said.
“It is quite difficult to make profit in business if each and every day food prices increase. Today I am buying a bag of food with a certain amount then the next day the price has increased,” he says.
“Our customers fail dismally to understand that food has increased and the Chinese are taking our market because they sell at a low price thus I run at a loss.”
Last week, a top attorney in Maseru who is also a prominent farmer, Tiisetso Sello-Mafatle, called a meeting for farmers to discuss these challenges.
She says the government must regulate the prices of livestock feed.
That is critical if the farming business is to succeed, she says.
Attorney Sello-Mafatle says farmers must come up with a structure for livestock feed prices which they would present to the government for gazetting.
“We should state our regulations and give them to the government to make everything easy for both parties because we cannot wait for the government to make regulations for us,” Sello-Mafatle says.
She adds that “farmers should be bullish about what they want and never have fear endorsing new things”.
“I will not be challenged or cry (because of) what life throws at me but I will cry when things are not happening the right way,” she says.
Mafatle says farmers need to know who they are and know the capabilities they have.
“This will help a farmer in becoming the best in any field they are in once they are confident about themselves,” she says.
Karabo Lijo, another participant, said they have to influence the cost of inputs in agriculture, especially livestock feed.
“We have to go back to cost-price analysis where as farmers we are able to derive the selling price and the break-even point in our production,” Lijo said.
“We can also derive the stable or constant mark-ups on our products,” he said.
“We need to do research to increase the ability to produce byproducts which are likely to have the longest shelve life,” he said.
The meeting urged farmers to diversify their products by introducing such things as mushroom farming. They said mushrooms can grow very well in Lesotho due to its favourable climate.
The farmers also demanded that there should be regulations on how land can be sold or borrowed in Lesotho.
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