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The current pyramid scheme in Ethiopia

The businesses are contesting the decision, claiming that people are confusing their strategy with pyramid schemes. All four foreign network marketing firms operating in the nation—the US-based Forever Living, the Chinese Tiens Group, the Malaysian Edmark and DXN firms—have been shut down by the Food, Medicine and Health Care Administration and Control Authority (FMHACA). For breaking the Authority’s rules, the removal occurred on November 7, 2013. The Authority listed the following infractions while sealing the storage areas of the businesses: encouraging sales of health supplements to individuals who do not require them; inappropriate storage of sold items; and selling supplements without a certificate of competence from the Authority. According to Samson Ibrahim, head of public relations at the FMHACA, the prohibition will be in place for the following three months. Network marketing, also known as multi-level marketing or referral marketing, is a direct selling marketing technique in which the sales force that moves a company’s products is paid not only for the products sold but also for the sales made by the salespeople each individual recruits. This tactic can be contentious, though, because, unlike traditional businesses, it necessitates salespeople approaching members of the public directly to vouch for products in order to close a deal.

A calcium overdose may occur, for instance, if a person consumes more than 2.5g of calcium per day, according to Samson. Without fully understanding the impact the medications will have on their health, the persons who offer these goods encourage others to use them. He added that several of the companies advertised their goods as medical alternatives. The restriction is being challenged by Tesfaye Kassa (MD), managing director of Forever Living Ethiopia, a business that imports supplemental foods as well as herbal beauty and wellness items. Tesfaye declared, “What the FMHACA did was wrong. “Like we are obligated to, we have a trade license and a certificate of competence. We accurately and on-time pay our taxes. He disclosed to Fortune that he had sent a letter to the Office of the Prime Minister asking them to act as their representative.

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