You can read the “PART 1” here


Accountants are professional number crunchers. For a business, and in particular a business seeking investment, an accountant’s skill is in tracing transactions, be they debits or credits, in cash or kind, and whether actually disbursed or received. All these transactions, and modes of transaction, must necessarily be recorded as entries  in a business’ ledger-book, profit and loss account, and in some cases balance sheet.


Additionally, with the widely documented shortfall in Federal Government revenue for the foreseeable future, internally generated revenue will increasingly be the focus of the government and a huge part of that focus is on tax revenue. Thus, the necessity of tax accountants (and lawyers) will be increasingly become more apparent.

This is also where a skilled accountant becomes an indispensable part of any organisation, be it full-time (ie in-house) and/or periodically with external accountants. In the case of auditors, namely, independent and government licensed (forensic) accountants, these professionals are by law required to inspect and report on the financial statements presented by all companies before their shareholders annually. These financial statements are also by law required to filed at the Corporate Affairs Commission, which will not accept any unaudited statements for filing.


In working with an accountant that understands a particular business or industry a company is able to work with the accountant to better understand the dynamics of his/her business. By having well kept books of account a business, and by extension an investor, is able to deduce some key information at a glance such as the strengths and weaknesses, areas of improvement/regression, and from where cash flow issues may or may not be arising.



Filing of annual returns and other regulatory obligations are becoming increasingly difficult to avoid for our mostly informal entertainment industry businesses and practitioners. As it now stands in Nigeria, companies that do not file or have not filed tax returns may have restrictions placed on them by the CAC that prevent such companies from a number of activities such as changing directors and altering share capital.

These may not sound important, but for Nigerian entertainment businesses, these restrictions can have very adverse effects when investment opportunities arise. Opportunities by way of: equity, i.e. shares, which may necessitate an increase in share capital and/or adding a representative of the investor to the Board of Directors; or debt, i.e. government/commercial loans application for which is increasingly predicated on eligibility criteria, with said criteria including audited accounts, minimum share capital requirements, and tax returns.

Furthermore, given the possibilities for the industry to attract investment by way of the capital markets, it is even more imperative that entertainment businesses get their preverbal houses in order in light of the even more stringent rules for companies sourcing investment from the capital markets. As it stands, aside from a handful of companies, there are no stakeholders in the Nigerian entertainment sector that would be eligible for any major capital investment; and it is only from such sources that the level of capital required to enable businesses to properly harness the profit-potentials of this huge market.

Government initiatives in the form of grants and soft loans have not been  particularly successful given substantially low take-up of same, in the most part due to a lot of the reasons cited above. Those very few companies that have managed to gain access to some of the available grants/loans (due primarily to their connections) are isolated, unconnected businesses that individually cannot make the necessary impact or provide the required stimulus to jumpstart the anticipated golden era of the industry.


Successful investors understand that the investment game is a gamble, and that there is always risk involved; after all, no pain, no gain. However, the common factors that most influence investment decisions bother on market opportunity,  risk assessment,  and stability of the proposed investment. Entertainment business owners need to look beyond immediate gratification and start to understand the fundamentals of how their respective businesses need to work in the modern, globalised world; and if they are incapable of gaining this understanding internally they must source suitably experienced professionals to advise them.



Nigerian entertainment businesses must begin to record, collate, and present all their transactions, with regard to both income and expenditure. This data can then be audited by a professional third party that will verify same. Until this becomes the rule and not the exception, our industry will continue in the same cumbersome fashion with individual and isolated success stories who will not even be able to fully maximise the leverage they gain with their success.


Creating and distributing content is not the issue; the real issue is the monetisation and formalisation, and professionalisation of said creation and distribution in order for entertainment businesses and the industry as a whole to attract more investment; foreign and domestic, equity or debt, private equity or capital market funds. Said investment, if managed and applied prudently would drive more growth, which would in turn attract more investment, and so on.


Thus, Nigerian entertainment businesses in this new year must ensure they professionalise their operations by documenting all their transactions, both figuratively in the form of books of accounts, and legally in the form of contracts, receipts, purchase orders, invoices, credit notes and other transactional documentation. The accounts and the said documentation can then be verified by an independent auditor which would then give them the necessary credibility to seek, secure, and retain investment. We have no choice but to take our respective businesses seriously and apply the necessary discipline and professionalism to attract more capital to the entertainment sector and the wider economy as a whole.

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