Does your business create true wealth by building assets and adding real value to the society? Does your business create wealth from accounting entries? What really does your business contribute to the society? Please do not get me wrong. Services such as medical practice is considered as real value adding products in the context of this article. However, some activities adds nothing and yet they “demand” the lion share of the cake!
I just read an article written by PACE. It was a good read as it provoked me into deep thought about the activities of several business enterprises in Nigeria. I encourage you to read the article, Burble Burst or Wealth Re-distribution?
For some years now, the agricultural, manufacturing and other sectors in Nigeria have been struggling to survive due to poor infrastructures and other challenges that are almost insurmountable. Funny enough, the financial sector, especially the banking sector has been declaring astronomical figures as turnover and profits at the end of each financial year.
The question that comes to my mind is, where do they get the profit from? If the real wealth producing sectors that the financial institutions are meant to service are not doing well, where do the high profit come from? Well, PACE gave a wonderful analogy which explains the situation in layman terms. The banking and other financial institutes in Nigeria have been creating “fictitious money” through double accounting entries.
Yes, while the real asset producing sectors are dying, the bankers are getting wealthier by cheer double entry accounting. They are helping to create more debtors in the system, and guess what, the chunk of the liability is owed to the bankers. So while the manufacturers, the agriculturists, and other artisans are impoverished and struggling to survive, the bankers are getting richer.
Now I understand better, how they can afford to spend lavishly on Porsche cars, expensive mansions and other luxury while they actually add nothing to the real asset of the nation. If you are a businessman, and you have been hoping of striking it rich by using this method, the recent crash in the stock market should serve as a lesson to you. If the banking sector do not change their methodology soon and very soon the bubble will get busted and they will be in real trouble!
Get productive. Add real value to the society. Exploiting people’s ignorance to get rich quick cannot build you an enduring business empire. It is just a matter of time, the bubble will get busted. It is obvious to me that the banking sector in Nigeria are already heading for trouble. That is why they look for every avenue to charge for all manner of services that are meant to be free. If you have not noticed, they have cooked up all manner of transaction fees that are not approved by the Central Bank. The charges comes with funny names e.g. Ledger charges for the month!
To the best of my knowledge, they have done nothing to help the Small and Medium Enterprises in Nigeria. Instead, they exploit their customers and help those who loot the national treasury cart away the nations wealth to foreign countries. I know my friends who work in those financial institutions won’t like this. But the truth must be told. Nigerian banks should create real wealth by helping the real sector to grow. Stop creating wealth by manipulating accounting entries!
Feel free to drop your view in the comment section. You don’t have to agree with me, who knows I might learn a tip or two from your view. Thanks for visiting.