Ahmed Hussein Ali and his family in Elasha-Biyaha, on the outskirts of the Somali capital Mogadishu, descended into poverty almost overnight after he lost their source of livelihood and all his savings through an online scam.
Earlier this year, Ahmed came across Trade Bot – a fraudulent pyramid scheme that he believed would make him rich.
He sold off all the food, sweets, and other small merchandise he was selling on his roadside stall and invested the entire $400 by mobile money into a Trade Bot account.
Ahmed was taken in by the marketers’ promise that his investment would grow and he would make more money to support his wife and five children.
However, days after signing up and investing his money, he was informed that the website was offline. He never heard anything more from Trade Bot.
“I didn’t have any doubts at the time, I didn’t know much about how the scheme worked, I just invested my money with no hesitation,” Abdi explained, regretfully.
“I was a businessman who owned his own business, but now I have lost it all. I just wish I could get my stall back.”
The family used to depend on the $4-5 profit that Ahmed made per day from the roadside stall. Now they have no choice but to reply on his relatives for food.
Ahmed said he had learned about Trade Bot from his friends, who had made some income from the platform. They urged him also to invest in what they saw as a money-making scheme. Online marketers had been advertising through online videos promising big returns on investments, catching the attention of many people like Ahmed with no awareness of the risks of fraud.
“I got convinced when I saw my neighbours had got good income, and that’s how I got into the app. The main reason was to make profits, but instead I suffered losses,” he said.
Ahmed could be among thousands of victims of online scams in Somalia, more and more of which are coming to light.
Apart from fraudulent sites, many Somalis have also been attracted to other popular online apps like the betting platform 1XBet, again having little understanding of the risks. 1XBet was banned on 20 August 2023 by Somalia’s Minister of Communications.
Abdirahman Sheikh Kalif, living in Dharkeynley, Mogadishu, sold off his tuk-tuk taxi for $2,000 and decided to place the money on 1XBet last October. He also threw in the $1,500 that he had in his savings.
He, his wife and daughter are now living precariously on occasional support from his uncle and are lucky to get one meal in a day.
“My dreams have been curtailed, I’m unemployed and staying at home mostly. I hoped to make profits so I could build houses and become rich. I lost the little money I had, let alone making any money. I don’t blame anyone, I got into it myself. I thought I could make more money,” he explained ruefully.
Abdirahman placed bets on the football teams he predicted would win matches in European leagues, but his predictions were all wrong and he lost everything.
Desperate to get himself out of the mess, he decided to migrate to Saudi Arabia in December looking for a job but was deported back to Somalia in February.
Abdirahman used to make a decent $20-25 a day from his tuk-tuk taxi. Today, however, he is penniless and highly stressed. He also has many debts to pay off.
“Since I lost my money and there were many people whom I owed money, I decided to stop betting,” he said.
Whilst the internet has opened opportunity for many through the provision of online services, the majority of people using the internet have little understanding about the risks.
According to Abdishakur Hussein, an independent and licensed trader in digital currencies based in Hodan district of Mogadishu, people often fall victim to online money-making schemes promising quick wins due to lack of awareness.
“These people usually use different strategies to appeal to the interests of many people. The online apps ask for little money and promise people riches. People are told they can make money without working. It is important for people to make careful judgements before parting with their money, so they don’t live to regret,” he said.
Trade Bot had collected large amounts of money from many unsuspecting Somalis before it disappeared and went offline in February.
The overall sum of money that people have lost to this app is unknown, although the pain it has caused is evident in stories of victims like Ahmed.
As internet access spreads in Somalia, there are concerns that much more needs to be done to educate users as well as regulating platforms and apps.
Abdishakur added: “They have taken huge amounts of money because many people invested in them. I know of a friend who lost $25,000 to Trade Bot. He had been saving up and was hoping to buy a piece land. He received part of the money in installments and lost the rest.”
