What Drives The Economy

I have always found the phrase economic growth to be rather nebulous and damn near impossible to accurately measure. Matters are made worse when every country’s stats body makes up its own formulae for calculating GDP, GNI and all sorts of other metrics that measure everything but ignore empty plates in the slums.

All this will ofcourse not prevent me from contributing my expert opinion on economic matters.

I think economics should be simplified for easy consumption by the public instead of making it sound like advanced space science.

At the core of it i suppose the economy is driven by exchange of goods and services. The more fluid the exchange and the bigger the catalog of goods and services that can be exchanged the healthier the economy gets and the bigger it grows.

An example is often given of a classroom experiment conducted by a trainer. He gave one student a dollar and asked him to buy something from one of his classmates. What he bought was just something trivial like a pen or a piece of string and as the exchanges dominoed around the room, there was a lot of interaction between  the buyers and sellers with haggling and negotiations. All surrounding one dollar worth of exchange currency. The result was that there was a lot of emotional fulfillment from the exercise and though there was no real net change of status of the participants materially or financially, there was benefit in terms of the experience and social lubrication that trade offered.

I thus tend to think the economy is less about how much money is flowing and rather how fast or how easy it is to transfer money or facilitate exchange of goods and services.

This is where the beauty of Mpesa and e-commerce companies that lubricate such transactions and enable citizens to buy and sell goods and services faster than they have done before. I have personally benefited from local classifieds here where all sorts of products are listed by regular people. Its almost like a flea market or garage sale of sorts only that its all run virtually. All this smoothens the transaction process and enhances social interactions not to mention that bargains are to be had as well.

Of course brick and mortar businesses(In this part of the world its more cement and iron sheets) benefit from the same liberation offered by the advanced technology

In this light then its rather strange that our govt keeps systems that are a nightmare for individuals and small businesses to navigate government business or take care of things such as taxes and claims. The only bodies that are able to do this comfortably are deep pocketed multinationals and even then comes at a great cost to them.

Well to their credit government bodies have started getting more open to possibilities of sharing data and reducing the bureaucracy involved with business registration and general transactions involved with the authorities. More needs to be done though.

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Safaricom 3G underperforming

I intend to keep my interactions with Safaricom to a minimum because contrary to their impressive PR machine they are not affordable at all. I kinda like keeping money in my wallet where possible and Safaricom tends not to like that. Not that I have a problem with their profits or anything. I think anyone who is smart enough should make as much money from the market as is sensible. They also have the best Customer Service this side of the continent. That helps.

I am usually on orange for data and voice and mostly on Safaricom for MPesa.

Early last week, I got sent to Kwale by the office and knowing that the only hope of getting broadband here is through Safaricom, I promptly bought 1GB of data and prepared to instagram the sh** out of some palm trees. The experience I go was far from broadband and could only be described as EDGE on Heroin. I could barely do anything despite the network icon indicating I was on HSDPA+.

Side Bar::

When looking for todays weather forecast, came across this:


Can’t make this stuff up.

End of Side Bar::

Now for Safaricom to have such issues makes a mockery of the premiums they charge.

Thinking this was an extension of the Pwani-sio-Kenya vibe i tried it out when I went upcountry to Nyeri. The performance was better but more sluggish than expected. I discovered this morning that my case was not isolated and as of yet no word from the affable CEO to anyone from the rank and file. This may not register on the QoS dashboard of the line managers but I think a sizable no. of subscribers is affected.

Not a problem anymore for me though when in the city  since I am on Orange on the go and Wifi at work and home.




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How badly do you want it?

There are a plethora of super star start-up founders who seem to have built their dreams into massive profit churning entities and in the process turning our underachievement into a big elephant in the room that keeps pooping.

It is tempting to think that these guys built up their enterprises by pure grit determination and alot of faith. Books such as Outliers by Malcolm Gladwell however try and explore the idea that pure inborn skill brings success. It is an interesting book and everyone should read it.

So what is the formula for success? What is the template that can be reproduced in every corner of the world to become successful?

I am afraid I have no idea and nobody else seems like they do. The one thing they seem to agree on is that how badly you want to do whatever it is you want is the most important factor determining your success. As Henry Ford said, ” Whether you think you can or you think you cant., either way you are right.”

It all comes down to how much you want whatever it is you want. Be it that girl, that job, that raise, seed money, recognition, respect etc. How badly you want is mostly the only thing that will determine whether you get it or not.

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Making money the old school way

Nowadays everybody is falling over themselves trying to make money in new exciting fancy ways like Google or Facebook. ‘regular ’ ways of making money are pushed to the curb and termed old, lame and unimaginative. All this when our world has not had any significant change in the basic structure. 

The rich are still rich, no revolution there. Women are still
objectified and considered somewhat inferior (Don’t deny it, you know
it’s true). Superior Civilizations (Technologically more advanced)
still call the shots and proceed to rape poorer societies by stripping
them of resources and all hope of meaningful progress. The youth are
fuelled by hormones and demand change and peace and equality and that
the suns temperature be reduced by 10 degrees immediately. When they
get old and get to control resources they say the youth of their time
are very unappreciative and should work harder rather than complain.
Kids in Mesopotamia didn’t like vegetables or doing homework. They
shared the consensus that their parents were dinosaurs and should
seriously consider upgrading their firmware even at risk of crashing
the system (not in those words exactly). How different are they from
our spoilt brats?

My point is we are not that different from the guys in the medieval
ages, in fact if you were born back then you would be just like them
or vice versa. Evolution takes millions of years not centuries. So we
aint that much brighter than Copernicus or the guys who burnt witches
at the stake.

Anyway my post today was about making money. The old school way of
making chums was by farming and industry. Making machines/tools/food
was the ticket back in the day for living in the house on the hill.
All these other guys are just hangers on and leeches on the core
industries. Though farmer’s aint the richest, they should be and they
are the single biggest contributors to the economy.

These realizations came to me as I listened to an uncle of mine
mesmerize us with how much a crop of Aloe Vera can rake in for you in
a good harvest. Aloe are (I think) a broad range hardy drought
resistant plants that need next to nothing from you. Just plant,
leave, come back to harvest. They are used to make all manner of
things, from shoe polish to lotions for chicks. All from one plant.
Now there is nothing as convenient as doing nothing and getting
something. Rabbits are another lucrative source of cash, the need
little in terms of food, and are fine eating scraps from your table.
Of course it may not be as easy as I put it but what am trying to say
is to be the one creating the raw material for others to use is a very
good vantage point.

If today I was told to invest in two or three sectors I would choose
Energy, Agriculture, and Water Utility. No industry can survive
without either of the above, and therein lays the secret. Demand can
only go up; only thing that changes is the price. The three industries
are not invincible but they are least likely to suffer without
everyone wanting to help out to bail them out.

So before you hatch another harebrain idea to burn your cash again,
Try go back ocha and figure out what the local sonko does. May be a
lot easier for you and you may wind up giving him some tips.

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