I know this may seem like a scathing assault on success stories and the “how we made it out of nothing” stories they tell but I tell you, the bulk of the business growth and development is rent seeking and the nerve to play government politics. It’s classic Russian Roulette, trust me.
Now, don’t get it twisted, there are people who started businesses and grew them right here in Nigeria out of sheer grit and persistence. They went on to reinvent the wheel. These kind of people gave what it takes and have grown their trade potentials.
I once spoke at a gathering to people about Adeola Odutola, a famous Nigerian industrialist who made tyres in the ’50s and how he started his empire. I also told the tale of the Okunowo’s who made the Damask material which was once in vogue and still is depending on what part of the world you are reading this from.
The Louis Ojukwu who built a transport business out of nothing and became one Africa’s richest men.
These stories are exciting because these men built from scratch, but today the competition is so tight and the capacity to meet these margins are getting tighter too, so a lot of people scale with rent seeking.
Just imagine the banks and their model of growth which used to be hinged on treasury bill buying and lending to government and their cronies. This is why the bulk of government debt is from domestic lenders.
Most bank owners enjoy the privilege of owning a state government account and this is also partly why they hardly lend to small businesses. Now, that too was a form of rent or the other. The shocking thing about rent seeking is that the financial flows of the economy are centered around few people.
Most recently, Ibukun Awosika revealed that the higher percentage of bank loans in Nigeria go to about 65 BVN numbers. I could further narrow it down to between 100 -1000 families who make up the Nigeria elite base.
With rent seeking, you must have struck a deal with government at some point to make the quick gains.
Don’t get me wrong there are people doing well without rent seeking but it is hard on them as well. Doing business in Nigeria is quite difficult. Scratch that. It is HARD.
Rent seeking makes it even more difficult to compete as a business owner because it presents an unfair advantage.
I’ll tell you a tiny part of my story. I once failed at a multi million dollar business not because I did not do what was right, but because the business climate was tough.
You may be thinking “… yeah, don’t we all say that” but it was hard to break even with problems of logistics, skilled man-power and more.
In spite of all these, I commend businesses creating jobs in the economy but for true economic prosperity there must be a level playing field for businesses, the government must be the referee not the 12th man of the team.
It is common knowledge that some policies are strongly in favor of some businesses over others but we must ensure true competition and spend on development.
The four technology companies in America which have a capitalization of over $1 trillion did not shatter glass ceilings by seeking rent. They crossed benchmarks through innovation, and the knowledge that collective success is worth more than exclusive success.
The reason for the economic challenges and inequitable distribution of wealth is the exclusive success mechanism that plays out in Nigeria and the time to change this is yesterday.
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