A decentralised solution

Did you know that there are still more than 700 million people in the world who live in extreme poverty? These people must scrimp, starve and struggle to survive off less than $1.90 per day. By 2030, the World Bank estimates that more around 90 percent of those people will be concentrated in Sub-Saharan Africa.

This is perhaps one of the greatest developmental failures of the modern world. Despite the continent’s expansive natural resources and increasing connectivity, foreign actors still feel it’s too risky to heavily invest in their markets.

Blockchain, however, could be the key to changing that! 

Bitcoin and “Blockchain” were created in the mass wave of distrust in banks after the 2008 financial crisis. Therefore, the technology enables individual, distributed data storage that could become the perfect evidence base and financial infrastructure for a developing country.

With the right implementation, Blockchain holds the potential to completely revolutionize and revitalize such economies, especially in Sub-Saharan Africa.

So, what is this Blockchain?

How Blockchain works

Blockchain is essentially a kind of decentralized database that allows individuals to have a safe, secure way to handle their data without the need for third parties.

For example, people with Bitcoin can make or accept payments in real-time without needing a centralized bank.

“[It is] a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer,” said software entrepreneur Marc Andreessen.

“The consequences of this breakthrough are hard to overstate.”

Why Blockchain could be the perfect fit for Africa

Until the mid-twentieth century, most of Africa was ruled under a colonial system meant to exploit the people and the resources for European benefit. However, they were rushed into development according to European standards rather than homegrown ones.

The legacy of rapid development, distrust and corruption left behind an economic system failing to recover in the 21st century.

While the World Bank celebrates a decrease in global poverty levels, the number is expected to remain stagnant in Africa. Today’s poorest people are living in places with the least economic growth. Sadly enough, poverty and lack of investment in many developing countries stem from how they were integrated into the world system.

The land was cut into countries according to European treaties and agreements, rather than by traditional and tribal land divisions. This situation worsened upon the handover of colonial power to so-called “democracies,” where power often shifted to the ethnic groups that former colonizers favoured.

Corruption multiplied in the form of bribes, political persecution, rigged elections and a massive wealth gap—all of which still affect the wealth distribution and investment potentials of many developing countries.

Of course, this created a lack of trust in banks and government throughout much of Sub-Saharan Africa. During a 2012 study conducted in rural Western Kenya, Stanford University researchers waived the costs of opening a basic savings account for a number of unbanked individuals.

While 63 percent of the subjects opened an account, only 18 percent of them used the accounts. This was likely due to three factors: a lack of trust in banks, unreliable service and prohibitive withdrawal fees.

Unfortunately, the prevalence of unbanked individuals in the informal sectors scares off foreign investors, who heavily rely on transactional evidence to make investments. Otherwise, pouring money into markets is too risky. That’s where Blockchain comes in.

How would it work?


Blockchain can host an entire evidence base of transactions, loan repayments and asset titles. The technology is also decentralized and requires individual confirmation, creating an element of trust and transparency beyond traditional banking systems.

According to Victor Olorunfemi, Director of Products for Pan-African tech and cryptocurrency exchange, KuBitX, Blockchain’s major benefits lie in “frictionless P2P and cross-border payments, transparent elections, land registry management [and] transparent crowdfunding.”

Let’s look at some of the different ways Blockchain could benefit developing economies, especially in Sub-Saharan Africa.

1. Creating financial infrastructure and accountability

According to a study by the Milken Institute, viable financial markets require consistent, accurate data on assets and credit histories. Luckily, Blockchain may fulfil these needs.

The use of Smart Contracts technology is ideal in areas lacking accountability, such as the real estate or land/agricultural sectors. In Africa, a lack of record-keeping practices often leads to “missing” or non-existent title deeds. In some cases, this is intentional.

Title deeds “go missing,” only to end up in the hands of benefactors other than the rightful owners. Smart Contracts could eradicate these issues through the use of special tokens that cannot be duplicated, changed or removed. See the article on tokenization.

Likewise, Bitland, a company in Ghana, currently helps individuals record deeds and land surveys. By resolving land disputes, Bitland creates more stability while accurately recording land asset data.

Blockchain has the potential to build up individual credit histories, as well. An individual could record on-time bill repayment or smaller transactions to obtain loans.

“There’s a massive number of people in the informal sector, but there’s not much data being collected on them right now,” said Merit Webster, co-president of the MIT Sloan Africa Business Club.

“That means you don’t have that credit history or payment history for them. If you have a decentralized approach to collecting data, you end up with more malleable data. [This] is very valuable for creating credit histories.”
The agricultural industry also has the potential to thrive using Blockchain.

“In the case of small-scale farmers, Blockchain technology helps with transportation logistics,” said Webster. “Blockchain could be used to track goods around the world. This allows farmers to earn a fair wage for their goods.”

Also, farmers could use record-keeping technology to streamline the supply chain and document resources. This would lead to better efficiency, lower transactional costs and improved logistics—especially for commercial farming activities that invariably contribute to exports.

2. Security in banking

According to the World Bank, there were 1.7 billion people with no bank account in 2017. This situation is worst in developing countries, especially African ones. For example, over 62 million of these people lived in Nigeria.

Besides, data from Google Trends reveal that Lagos, one of Nigeria’s biggest cities, ranks globally as the number one city based on the volume of online searches for Bitcoin (BTC). Clearly, for the city’s 21 million-odd people, there an immense interest in some form of an accessible payment system.

N26 Bank
N26 Bank

Of course, it’s unrealistic to expect bank branches to magically appear in every remote corner of the world. However, a digital database using Blockchain technologies has the potential to reach far beyond physical banks.

Many Africans value trust and transparency. In developing countries, this lack of trust goes beyond the Internet. Developing countries with less industrialization tend to have higher levels of corruption. This reduces national investment opportunities in the public sector and instils a lack of trust in centralized oligarchs handling international investment.

Because its power lies within the community of users, Blockchain can combat these trust issues. All data logs and amendments must pass through this community and identification confirmation tests.

Blockchain technology also secures its data incredibly. Hacking and data breaches are all too common nowadays. In 2017, for example, around 3 billion Yahoo user accounts were stolen. When information is stored in the same place, hackers have one, easy target. In contrast, Blockchain is a distributed entity. This dissemination of data leaves it far less vulnerable to cyberattacks.

3. Fostering Entrepreneurship

Coupled with the Internet, Blockchain technology could be the perfect platform for aspiring African developers. Because the ‘source code’ is free of charge, skilled coders can adopt, create and configure special applications, called DApps, via Crypto platforms provided by companies like Ethereum, Tron and even a South African firm specializing what they called the Keto-Coin.

Rather than waiting for governments to drag their feet trying to create jobs—which they tend to do—individuals on the continent can form small firms that build and sell Crypto-based Apps locally or abroad.

“Despite the frictions and impediments mentioned,” said Olorunfemi. “Blockchain can still provide an avenue for promising African tech (and even non-tech) projects to access capital (foreign direct investments) via token offerings on digital assets exchanges.”

Many courses are even readily available online to quickly learn about the new technology. Microsoft, for instance, offers a platform via Azure to build and learn about the Blockchain.

One-man shops in countries with unfavourable economic systems, like Zimbabwe, can also adopt smaller, stable, Crypto-built Apps/coins to facilitate or replace payment systems. In cases of rampant inflation, Cryptos can temporarily act as a store of value or help pay for things until the currency stabilizes again.

As with the Venezuelan hyperinflation case study, Cryptocurrency intervention could help many developing countries troubled with economic instability.

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There is also the option of Crypto-mining. Now before you pull out the high-energy (electricity needed to power PCs that mine Cryptocurrency) argument, think outside the box for a moment. What about energy sources that are free and available nearly 24/7? Like water and the sun!

The African continent is full of capable scientists and mechanical engineers. One could build special solar-powered energy centers to power Bitcoin-mining.

And without the expertise, governments or private companies could alternatively just invite Crypto companies with abundant financial resources to mine (cleanly) for a special tax/fee while creating jobs for the locals.

4. Elections

In addition to the financial side of things, Blockchain technology could help eliminate some forms of corruption. For example, many African countries’ elections are incredibly vulnerable to the social scourge. In some extreme cases, some officials change or forge written ballot votes to rig elections.


To combat this, Blockchain databases could record votes, which are nearly impossible to tamper with using Smart Contract technology. Having fair elections improves infrastructure, which then increases development and economic dependability.

Blockchain non-profit company Cardano, this year, has partnered with the Ethiopian government to battle these issues specifically.

5. Leapfrogging

While some might see Africa’s economy as underdeveloped, others might see it as a blank canvas well-suited for a large-scale implementation of Blockchain. Economic and governmental systems are shifting and slightly shaky in many Sub-Saharan African nations.


Although these facets have been detrimental in the past, this also means that there is no rigid current economic system to upend to implement Blockchain.
Don’t just take our word for it—African nations have often implemented new, practical technologies before the Western world. Let’s look at the example of M-Pesa. Back in 2014, Americans and Europeans were amazed by Apple Pay’s launch.

However, this mobile payment system wasn’t exactly “new.” By that time, Kenyans had used M-Pesa, a very similar technology, for years.

“There’s a lot of opportunity to leapfrog the way the West developed and have these more unique African solutions, but it needs to come from within,” said Webster.

“It needs to come from entrepreneurs in the continent who want to implement these solutions. It’s important to engage people very early on. Systems incubated in the West don’t stand as great of a chance to work as African ones do.”

With the possibility of an experimental, large-scale takeover of Blockchain technology to improve African infrastructure, the nations there could leapfrog in development and growth, surpassing current World Bank expectations and its developing national counterparts.

This must begin internally. According to Olorunfemi, “Education—of policy makers and other stakeholders—which is often ignored has to be a critical factor in paving the way for the acceptance and adoption of new technologies and the accompanying investment.”

The results in Sub-Saharan African countries could help eliminate much of the world’s poverty, along with remnants of mistrust and corruption left behind by the days of colonial exploitation.

While there are some obstacles to large-scale Blockchain implementation, we can’t think of a better benefactor than there. The possibilities for business using the Blockchain are endless!

To learn more about how to get started with Cryptocurrency mining or purchasing, visit our resources page for useful links and guides.

Additional input by Bobby Quarshie (BQ). 

Citations: Christopher Lee and Jackson Mueller. 

Swan, Melanie. “Anticipating the Economic Benefits of Blockchain.” Technology Innovation Management Review 7.10. Oct. 2017.

Bitcoin Lessons from Venezuela, Where Hyperinflation Reigns. Online Source: https://www.lathropgage.com/newsletter-237.html


Can’t Get No Satisfaction

In economic terminology, the term “utility” has not much to do with multifunctionality nor completing specific useful tasks.

It does in context, relate to the level of satisfaction or “completeness” one derives from the consumption of a product or service. For example, there is only so much pizza one can eat before feeling ill from satiety.

On a broader and more macroeconomics spectrum, our utility levels will also help determine how resources are allocated and consumed.


The concept, a brainchild of Daniel Bernoulli, has so many relevant connotations. As humans, we individually have a maximum biological boundary which when reached, signals absolute satisfaction. This in economic terms is called maximum (total) utility.

Total utility as the complete satisfaction that you can get from consuming all units of a specific item.

Economists are more interested in the changes in levels of utility or what is referred to as the marginal utility.

We will return to its application to the economy.

Applying utility

Incidentally, utility has no formal unit of measurement – though some have coined the term “utils”. These so-called utils equate a number to utility levels in a controlled sample experiment.

Understandably it can be quite a feat to quantify utility as it is based on human behavioural preferences. The closest we got to quantifying such was via the marketing concept of the consumer black box.

N26_banner-160x600-ENAs an illustration, the concept can be applied to something as basic as eating a delicious meal.

Depending on how hungry you were, you would derive the highest utility from the first few bites of your meal.

As you progressed and depending on your appetite, each additional fork, spoon, handful more would provide fewer levels of satisfaction. As you reach your stomachs capacity (inch towards satiety) your utility diminishes.

This can be applied to the taste of the meal. It specifically explains why we tend to eat something sweet after a main (savoury) meal.

The appreciation of ice cream when you are starving would diminish quickly as you concentrate on filling up your stomach. This as opposed to enjoying the taste.

When applied properly to the running of an economy, governments and policymakers can determine which goods and services yield the most maximum utility.

This helps them to consequently direct expenditure to identified priority areas (products/services).

It is a long term concept

Education, for instance, may not provide immediate utility (gratification) for scholars and pupils. However, when appropriately harnessed, it could yield higher levels of satisfaction as individuals enter the job market with better remuneration packages.

Tweaking education curricula, taking into consideration levels of utility to whip up interest for the good of the individual. This should, therefore, be a prime focus for legislators.

Inputs such as maximum times that students can concentrate and the length of study for a degree, diploma or course should be offered without compromising the substance.

Without a doubt, there would be considerations, at a micro-level to assist in enhancing both marginal and total utility in the education sector.

Read more about fiscal policy and budgets here

More life-related uses

The concept of utility is a lot less ubiquitous as we think and relates to the unsavoury phenomenon of megalomania and why we have greed.

When the level of satisfaction or self-gratification diminishes quickly, you find that it takes longer for those experiencing lower levels of marginal utility to reach a plateau of pleasure.

Drug addiction, sexual appetites, and fetishes would then kick-in in such cases where people upgrade the “product or service” that they have already maximized their utility. At that stage, another level of fulfilment would be sought.

Utility applied to finances

120x600It also explains why people lose a lot of money gambling or investing in stocks. The satisfaction of gaining more for a little outlay based on your decisions, will often drive you to take more risk until a level of risk aversion kicks in.

High-risk equity investors “called whales”  are now delving into the Crypto market to maximize their utility. They are diverting their funds from property and stock trading into digital currencies like Bitcoin and Ethereum.

The saying too much of a good thing is inevitably bad for you applies and can be countered by diversifying the things that deliver pleasure or satisfaction.

This is to ensure that you do not maximise utility on them too quickly and lose interest.  Worse case, delve too deep into the dangerous territories of addiction.

Economists need to be relevant, more than ever before. They also need to formulate a means to measure and quantify utility or provide “utils” for at least, the most common goods and services.

With such a strategy, policy-making, product pricing and the efficient allocation of resources would be more effortless.

How would you like to be served?

The thought of “servers” and “hosting” are rarely things you consider on a daily basis. If you are not an IT or a software architect, then probably not at all.

For the mentioned professionals, however, these decisions are critical to the operations of a business however large or small.

There is a fine line between how and where software systems are used. This line has become thinner because of evolving cloud technology and automation.

Sourcing and deploying the right IT architecture could therefore help your business stay afloat, or sink without.

Communication is key

The most effective mode of communication in any business (other than verbally or telephonically) is still the electronic mail or E-mail.

It is effective because it helps you to form a time-stamp and a reference point when it comes to documentation. This is an important aspect when it comes to legal obligations and commitment. Emails are, therefore, something that should not be taken for granted!

We consequently send, receive emails with attachments and receive them through various devices. All  without a second thought as to how this happens.

After all, this is the job of the IT-guys, right?

Well quite rightly so. They often must battle with their respective management and board of directors for funds to keep this going without compromising operations. And this from not only a daily functional point of view, but from a security and software compliance facet.

Defining servers

Your company’s IT infrastructure: Emails; File-servers; Databases (CRMs and ERPs) and other communications tools are commonly hosted (managed) on-site on systems referred to as ‘on-premise’ solutions.

These are managed by computer-like CPUs  that look like the standard boxes that you plug your monitor and keyboards to. They however, have a lot more processing power and storage and are called Servers.

Servers naturally must be kept cool because of the heat they generate from being on all the time. As you can imagine, built-in fans are far from being enough to cool them off!

If you didn’t know, there is likely a (highly) protected server room in your building that is kept as cold as the cold storage for meat factories.

Now there an array of servers types. Each of them is designed to run the tasks of mail exchanges, file-storage, and sharing, the storing and deploying of remote PC operating systems. Others handle databases and many more dedicated functions.

You would need to have the licensed software to operate each server providing unique services. This makes it quite an expensive outlay if you have all of the abovementioned requirements!

Servers are not irreplaceable and can overheat, get corrupted or crash like a hard-drive (or a NAS server system). They therefore need to be maintained at a cost to the company via your IT department.

Depending on the amount of data and complexity, maintenance is sometimes outsourced to specialised IT companies or the software license providers.


In the early 2000s  ‘the cloud’ or ‘cloud computing’ became a new concept. Cloud-computing is basically a very large set of high-end servers equipped with software to manage all the tasks mentioned above. It is usually offered as a service under a single (monthly or annual) subscription.

So basically, you are renting the service of a server as opposed to owning it. Renting, just like with property or cars, relieves the user of all the costs of maintaining the product in question.

This sort of rental service offered by cloud service providers is now known as Software as a Service (SaaS). This also saves you from purchasing any hardware let alone paying for the extra electricity bill to cool a server room.

According to Quora.com, the main difference between a cloud and a datacenter is that a cloud is an off-premise form of computing that stores data on the Internet.

A datacenter, on the other hand, is an on-premise set of hardware that stores data within an organization’s local network.


As an IT professionals you would face the burning question of whether to go for a solution that will  relieve them of mundane tasks such as server maintenance. Naturally, you would also want one that facilitates the daily administering of user profiles, mail/data archiving and backups.  But to what costs then?

Deciding on which to go for

There are many pros and cons when it comes to the hosting of a company’s data on a server as opposed to having it run via the cloud.  There is also a massive array of choices and bundles between the top cloud-service providers.

This makes the decision-making process a little harder for directors – who often don’t have the time for such tasks.

Cloud service providers for starters, have several data centers used as backups. So a service like email hosting, will have several servers in different locations to serve that function alone.  This curbs the risk of your data getting lost, unavailable or even hacked.

Naturally, Datacenters are kept highly secure  in undisclosed locations globally. Google is known to have one of its datacenters floating on a massive container ship somewhere over the Atlantic ocean.


Maintaining a server is expensive as they (as mentioned) require massive cooling systems. Some smarter companies like Microsoft, are now taking to the deep oceans for that function.

When it comes to email hosting or the storage of files in the cloud nowadays only five large multinational corporations’ names come to mind: Microsoft, Oracle, Google, IBM and Amazon.

These companies however bear the burden of maintenance, while providing just the service you require on a subscription basis.

Setting up an on-premise solution, in contrast, can be a tedious exercise and an expensive one. This especially for individual companies who do not have large IT budgets.

In addition, the argument of “once-off” payment to own the server is rendered obsolete. This is because the actual hardware and license models change very quickly nowadays.

Licensing a server is no child’s play either. Having to decide on costs and functionality will determine how to license. This would be either per server, per virtual machine needed, or per processor core and then you need CALs).

If you don’t believe it, just have a look at this licensing guide!

An example

To illustrate the difference, an outlay of a hundred thousand dollars just for the software licenses for three years. This compared to a cloud-hosted solution/package that performs the same function over the same timeframe.

You can literally piggy-back off companies like Amazon and Microsoft’s security services, which then costs 8 thousand dollars monthly (96k annually).

So, within three years of using the cloud, you would have reached the $100K cap that would be spent only for licenses. You would have also saved with an extra $188K in additional services.

This is a portion of what would have been spent on maintenance, technical support, security, upgrades and updates.

These figures are rudimentary, but the long-term savings are noticeable as cloud service providers tend to provide value-add solutions when pricing their bundles.

Microsoft has for one, recently launched its Microsoft 365 package which includes an upgrade to the latest operating system (Windows 10 Professional or Enterprise). This is something IT professionals would have had to source separately.

Stress relievers

Software deployment and the administration of user accounts is cloud-based. This means you now be perform this conveniently and remotely from a PC, Laptop, Tablet or even Smartphone!

This means as an IT professional, you will now have more time to oversee more important issues like data security and overall IT policies. Better yet, you can now look into ways to automate and improve systems further.

This is possible without the inconvenience of running from PC-to-PC to install operating systems, Office software or manage mailboxes.

The remote desktop services of an on-premise server were a step in this direction but are a pain to set up. So, you can view the cloud as an evolution of remote-desktop services.

Infrastructural setbacks

The only (and potential) hindrance to using cloud services naturally would be the availability of good and cheap broadband (Internet connectivity).

Without both, the justification for running your business fully on the cloud would not stick. Some businesses, especially in developing countries, are, in a desperate attempt to adopt the cloud in the future. They use what is known as hybrid-systems: a combination of cloud and on-premise solutions.

120x600If you operate in a country without forward-thinking government officials that facilitate broadband availability, you will suffer the most.

Like an old, car, outdated hardware and software can lead to costly services (especially for out-of-date and warranty solutions). This means heftier maintenance fees and support costs from third-party IT professionals who bill you by the hour.

The common old rhetoric of not trusting the cloud is also one of the past. Cloud services often outperform on-premise solutions when it comes to high-end security software and data protection. This is because of the obvious economies of scale involved setting up expensive security software.

The level of security would naturally have to be the digital equivalent of Fort Knox. This has to be the case especially if you are dealing with sensitive data such as financial, legal services, healthcare and educational institutions.

Your company would need a system that will keep such data secure and compliant.

So, rest assured the cloud-providers go all out to keep the trust of their clients though highly stringent and compliant online security systems.

With data now being treated as a commodity and the subsequent need to trade and value it, we now have Blockchain and digital currencies like IOTA and Dogecoin being used to facilitate payments. This while keeping data encrypted, decentralized and safe.

Lastly, in the advent of the new GDPR laws, some companies will still opt to keep and maintain their servers internally.  By doing this however, they might lack transparency and tools needed to show their consumers how their data is being handled.

Such companies must source out third-party solutions to keep their data management systems compliant. This adds further costs to a problem that could easily address by subscribing to a SaaS solution.

How countries operate

At times, we can all become frustrated by political agendas, misfortunes and perceived lack of planning by various governments around the world. As a result not quite often seeing the bigger picture – or the economics of how countries work.

Naturally, the political fracases provide fuel for media companies who in turn bombard us with their 24-hour news cycles. But we need to understand that politicians are only temporary custodians of the country and its economy.

Each economic model is built on the same premise that started many hundreds of years ago – that of bartering.

Two pillars of government

There are two main mandates or rather tasks that a ruling party is assigned by the electorate when it comes to governing. These are: controlling the country’s fiscal and monetary policy.

Fiscal policy is the internal running of the country and basically deals with tax and how it is allocated. The fiscal budget is then awarded to the various sectors of any economy.

These include education, transport, healthcare, finance, trade and industry, defence, agriculture and many other building blocks of your country.

How the government prioritizes the spending on each of these sectors will determine its policy priorities. It will also be a signal of its wider political intentions. And this not only to voters but also to its neighbouring countries in regard to international trade and security.

A nation concerned with information and its human capital will prioritize education in its budget. There are however other approaches to budgetary allocation such as funding trade and industrial activities.

This leads to job creation that will, in turn, drive a need for tradesmen and women to diversify and obtain the new skills required.

This also provides an incentive for state-run schools, privately funded schools, and institutions to develop new skill sets.

Doing both is ideal – as governments must foster innovation by promoting and funding higher learning institutions where top talent can be nurtured and developed.

Fiscal policy forms the larger mandate as this budget is derived from the collective taxation of income, capital gains, trading and customs, sin taxes, corporate, and simple public services.

That way allocation of the fiscal budget to finance will pave the way for monetary policy to function.

International trade is the key to generating further income as a government cannot rely on an internally driven economy to sustain wealth. The same applies to business so an agreed trade policy would need to accommodate all aspects of the country’s economy.

National specialization

Every thriving nation has been built on either skilfully utilizing internal resources or have created global demand for a service or industry.

The UK has strong financial and corporate offerings plus its geo-positioning (GMT) allows it to be a central commercial trading point for the world.

Germany has always had a rich source of steel enabling the production of cars, rail brands, and manufacturing.

In addition, it continues to be a market leader in developing technologies to compliment those industries thus allowing the country to thrive as a major European power.

The Nordic countries are rich in mineral resources of which they have converted the revenues into national trust funds. These are used to aid its citizens; many of whom develop skills in trade, innovation, and finance (and now Fintech).

Though Japan is a geographically smaller and is made up of two islands it continues to prosper by becoming a global leader in the exporting of innovation, artificial intelligence (robotics), fishing stocks.

It even ‘exports’ financial aid (loans) to other countries due to strong and disciplined monetary policy.

The US has invested heavily in services, human capital, and innovation – to a large extent immigration has played a major role in these areas of growth.

The emerging economies

Russia is mineral-rich and has outsourced its intelligence gathering skills, military technology, and training for years.

China continues to grow and subsidizes its agriculture and manufacturing industries fully utilizing the abundance of manual labour at its disposal.

China even exports this labour thus gaining influence and soft power enabling Chinese goods and services to be exported more freely to other economies.

The ability to offer the global economy a form of expertise or goods/service can attribute hugely to each country’s economic wealth.  Israel – military and intelligence; Brazil agriculture and tourism not to mention countries in the Far East – oil and fossil fuels.

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Most African countries obtain their sources of income (though not as much as they should) from natural minerals, agriculture, and tourism.

Ghana has gold and cocoa; Nigeria – oil; South Africa – gold and many mineral resources; Kenya and Tanzania – tourism. Even a poor country like Zambia has survived because of its coal and coffee reserves.

Any country without resources or the ability to offer goods and services would have to be more subsistence-like. This usually means having to rely on aid or import goods and services.

That, however, comes at a price and leads to the country functioning with an unsustainable debt burden.

Application of policies
Interesting food for thought by Dr. Jagdish Bhagwati, a famous Indian-born economist in the US:
Americans spend, save little. Also US imports more than it exports.
Has an annual trade deficit of over $400 billion. Yet, the American economy is considered strong and trusted to get stronger.
The Japanese on a contrary, save a lot. They do not spend much. Also, Japan exports far more than it imports, has an annual trade surplus of over 100 billion. Yet Japanese economy is considered weak, even collapsing.
Modern economists complain that Japanese do not spend, so they do not grow. To force the Japanese to spend, the Japanese government exerted itself, reduced the savings rates, even charged the savers. Even then the Japanese did not spend (habits don’t change, even with taxes, do they?). Their traditional postal savings alone is over $1.2 trillion.
Thus, savings, far from being the strength of Japan, has become its pain.
International trade

This then gives way to various trading blocs, which over time have been built, broken or renegotiated when it was not suiting either of the participants.

The strength of a country’s currency is primarily determined by supply and demand for its sovereign currency – but demand can only be fostered by trade.

The more the demand for a countries commodity the greater the demand for its currency – which is the medium we use to compensate for transactions.

In terms of a country’s monetary policy, it is more of a singular relationship between a government and its banks.

The banking system

Banking is the system to which people can place their disposable income (gross income after tax). The central (reserve) bank regulates the money supply into the economy ensuring that locally, inflation does not corrode the value of its currency.

The central bank controls how much it lends to local banks and at which payable interest rate.

The central bank is independent of government. They have their policies shaped by fiscal influences and is under obligation to impact the strength of the economy through its interest rates and exchange rates.

So, the central bank sets the mandate by which banks offer security interest, loans and building deposits to help you benefit from their hard-earned cash.

Banks, however, have a wide range of consumer charges so transacting doesn’t offer much protection against inflation. In some cases, banks offer you zero interest on savings deposited!

You can therefore understand the frustration of citizens who would like to see increased corporate taxes especially for banks.

This especially as they reward executives with excessive remuneration packages even in a failing economy.

Financial governance and regulations

The new wave of Cryptocurrency aims to shake-up these long-standing benefits banks have enjoyed.

Benefits such as the bailouts from taxpayers’ money from risk-taking behaviour that nearly brought the global economy to its knees.

Like a petulant child knowing well that its parents will only mildly reprimand but ultimately still allow the continuation of behaviour with a slap on the wrist.

Governments continue to tolerate excessive wage packets and risk-taking due to the fact banks play a strategic role in the stability and growth of an economy.

This is just a tip of the iceberg and paints a big picture of how a country is managed – or indeed can be mismanaged.