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A REPLY –OR BETTER ADDITION TO MS RACHEL GYABAAH’S ARTICLE IN THE BUSINESS&FINANCIAL TIMES DATED NOVEMBER 20,2024 “BRICS: THE NEED FOR AFRICA TO CAREFULLY BALANCE THE GLOBAL FINANCIAL ARCHITECTURE AMID GLOBAL POWER STRUGGLES”

 

AUTHOR: HANS PETER RECKLING

ORGANISATION: GHANA RESEARCH

WEBSITE: https://www.recklingenterprise.com

SUBMITTED: 20/01/25

 

CONTENTS

INTRODUCTION

BEGINNING AND DEVELOPMENT OF NDB

2^ND NDB STRATEGY 2022-2026

MISSION OF NDB

PROFILE OF NDB

NDB WITHIN THE FINANCJAL SYSTEM – PRESENT AND FUTURE

LINKAGE BETWEEN NDB AND BRICS

CONDITIONS FOR  A MEMBERSHIP OF GHANA AND OTHER AFRICAN NATIONS IN BRICS AND NDB

ADVANTAGES AND DISADVANTAGES FOR GHANA AND OTHER AFRICAN NATIONS OF AN NDB AND BRICS MEMBERSHIP

CONCLUSION

 

 

 

 

INTRODUCTION

FIRST OF ALL, I WANT TO THANK MS. GYABAAH FOR HER INTERESTING ARTICLE. IF ANYTHING, IT BRINGS TO MIND OF THE GHANAIAN READER THE EXISTENCE OF THE BRICS ORGANISATION AND ITS SUCCESS SINCE ITS INAUGURATION.

HER CONCLUSION, HOWEVER, WAS A LITTLE BIT TOO CAUTIOUS FOR MY TASTE. AFRICA IN GENERAL, AND GHANA IN PARTICULAR, MUST SEIZE THE OPPORTUNITY. A MEMBERSHIP IN BRICS – OR FOR THE MEANTIME AT LEAST AN OBSERVER STATUS, AND THEREFORE AN APPROACH TOWARDS THE ORGANISATION – WOULD BRING TO THE COUNTRY AND THE CONTINENT AT LARGE.

AS MS. GYABAAH FOCUSSED MORE ON THE POLITICAL SITUATION A POSSIBLE MEMBERSHIP FOR GHANA WILL BE CONFRONTED WITH – AND UNDERSTANDABLY POINTED OUT THE GEOPOLITICAL RISKS – I WILL STRESS MORE THE FINANCIAL AND ECONOMICAL FACTORS, AND LOOK AT THE “NEW DEVELOPMENT BANK” (FOLLOWING CALLED NDB) WHICH WAS FOUNDED BY THE FOUNDING MEMBERS BRAZIL, RUSSIA, INDIA, AND CHINA PLUS THE LATER JOINING SOUTH AFRICA. FIRST OF ALL, I WILL INTRODUCE A BRIEF HISTORY OF THE NDB WHICH I TOOK FROM ITS STRATEGY PLAN 2017 TO 2021:

 

BEGINNING AND DEVELOPMENT OF THE NDB

FIRST OF ALL, I WILL INTRODUCE A BRIEF HISTORY OF THE NDB WHICH I TOOK FROM ITS STRATEGY PLAN 2017 TO 2021:

Trajectory of NDB’s Creation

NDB was established by Brazil, Russia, India, China and South Africa in the context of the BRICS mechanism, along with the BRICS Contingent Reserve Arrangement. At the March 2012 New Delhi Summit, the leaders of BRICS countries directed their finance ministers to examine the feasibility and viability of setting up a new development bank that would support economic growth in BRICS and other emerging economies and developing countries. One year later, in the Durban Summit in March 2013, BRICS leaders announced the start of formal negotiations to establish NDB. The Agreement on the New Development Bank was signed during the BRICS Summit held in Fortaleza on July 15, 2014. Following ratification by all five founding members, the Agreement entered into force on July 3, 2015. The inaugural meeting of the Board of Governors of NDB was held in Moscow on July 7, 2015.

CURRENTLY, THE NEW DEVELOPMENT BANK (FOLLOWING, I ‘LL USE THE ABBREVIATION “ NDB”) IS IN THE SECOND FIVE-YEAR TERM OF STRATEGY PLANNING.

IN THE AGREEMENT ABOUT THE FOUNDING OF NDB THAT WAS SIGNED BY THE FIVE BRICS MEMBERS, IT IS STATED THAT THE SIGNING MEMBERS ACKNOWLEDGE THE CONSTRAINTS DEVELOPING COUNTRIES AND EMERGING ECONOMIES FACE IN TODAY’S GLOBAL ECONOMY.THE PURPOSE OF THE BANK SHALL BE TO MOBILISE RESOURCES FOR INFRASTRUCTURE AND SUSTAINABLE DEVELOPMENT IN BRICS COUNTRIES AND OTHER DEVELOPING COUNTRIES. THE MEMBERSHIP IN NDB IS OPEN TO ALL MEMBERS OF THE UNITED NATIONS AS BORROWING AND NON-BORROWING MEMBERS. THE NON-BORROWING MEMBERS ARE CLASSIFIED AS DEVELOPED NATIONS, WHOSE MEMBERSHIP IS LIMITED TO 20% OF ALL MEMBERS, TO AVOID A CONTROL OF DEVELOPED NATIONS IN THE BANK. THE BANK WAS THEN LAUNCHED ONE YEAR AFTER THE AGREEMENT IN 2016.

THE FIRST AND FOREMOST INTENTION OF THE NDB – ACCORDING TO THE AGREEMENT – IS TO MOBILISE RESOURCES FOR INFRASTRUCTURE AND SUSTAINABLE DEVELOPMENT PROJECTS.

THE FIRST STRATEGY PERIOD OF THE BANK DATED FROM 2017 TO 2021. IN THIS PERIOD, THE MISSION AND THE TARGETS WERE MANIFESTED. THESE TARGETS WERE IN PARTICULAR:

— BUILDING NEW RELATIONSHIPS WITHIN THE MEMBERS OF THE BANK AND EXTERNALLY;

— DEVELOPING NEW PROJECTS AND THE INSTRUMENTS TO FINANCE THEM;

— DEVELOPING NEW APPROACHES FOR FINANCING IN THE EMERGING ECONOMIES.

(NDB’S GENERAL STRATEGY 2017-2021, P.3F.)

BUILDING NEW RELATIONSHIPS MEANS DEVELOPING TRUST BETWEEN THE BANK AND THE MEMBER STATES.

DEVELOPING NEW PROJECTS AND NEW FINANCIAL INSTRUMENTS MEANS THE BANK LAYING EMPHASIS ON SUSTAINABLE PROJECTS. FURTHERMORE, BUILDING SUSTAINABLE INFRASTRUCTURE IS AT THE CORE OF THE BANK, AS MOST OF DEVELOPING COUNTRIES AND EMERGING ECONOMIES LACK MODERN INFRASTRUCTURAL BASICS. REALISING THAT THERE IS A GAP IN THE FINANCIAL ARCHITECTURE, THE BANK IS READY TO FILL IN THIS GAP FOR THE BETTER OF THE EMERGING ECONOMIES.THAT INCLUDES LOW INTEREST RATES AND OFFERING LOANS IN LOCAL CURRENCIES.

ADDITIONALLY, THE BANK ENVISAGED NEW APPROACHES, ESPECIALLY CONCERNING THE HANDLING OF LOAN DISBURSEMENT. THE BANK USES A TWO-WAY APPROACH TO RISK MANAGEMENT: LOW RISK PROJECTS ENJOY A FAST TRACK APPROVAL AND OVERSIGHT, WHILE HIGH RISK PROJECTS ARE PUT UNDER MORE SCRUTINY IN APPROVAL AND OVERSIGHT.

THESE ARE THE MOST IMPORTANT BASICS THE BANK INTENDED TO INTRODUCE IN ITS BUSINESS ACCORDING TO THE GENERAL STRATEGY 2017-2021. NOW WE WILL SEE HOW THE BANK PUTS THESE UNDERLININGS INTO REALITY DURING THE SECOND GENERAL STRATEGY 2022-2026.

 

 

 

 

 

 

 

 

2^ND NDB STRATEGY 2022-2026

THE SECOND STRATEGIC PLAN OF THE NDB IS CHARACTERISED BY THREE MAJOR ISSUES: THE MISSION OF NDB, THE PROFILE OF NDB, AND THE POSITION OF NDB WITHIN THE FINANCIAL SYSTEM – HOW DOES IT LOOK LIKE NOW, AND WHAT WILL NDB’S POSITION IN THE SYSTEM IN FUTURE.

MISSION OF NDB

THE TITLE OF THIS SECOND STRATEGY PAPER FORMS ALREADY THE BASE FOR THE MISSION OF NDB: “SCALING UP DEVELOPMENT FINANCE FOR A SUSTAINABLE FUTURE”. IT CONTAINS TWO ELEMENTS: DEVELOPMENT FINANCE AND SUSTAINABLE FUTURE. THE BANK SETS ITS TARGET TO BECOME A LEADING MEMBER OF THE FINANCIAL SYSTEM TO SUPPLY EMERGING MARKETS AND DEVELOPING COUNTRIES WITH RESOURCES FOR SUSTAINABLE PROJECTS. THUS, AFTER IN ITS FEW YEARS OF EXISTENCE, NDB HAS ALREADY FOUND ITS PLACE WITHIN MULTILATERAL DEVELOPMENT BANKS (MDB’S).

THE BANK REALISES THAT THERE IS A GAP BETWEEN DEVELOPED AND EMERGING ECONOMIES, AND THAT THE EXISTING MDBS CANNOT FILL THIS GAP. CONSEQUENTLY, NDB SETS AS ITS MISSION THE SUPPORT OF THESE EMERGING ECONOMIES, IMPROVE THE INFRASTRUCTURE IN ITS MEMBERSHIP COUNTRIES AND SUSTAIN THEIR FINANCIAL STRUCTURE.

PROFILE OF NDB

SINCE ITS START AS AN IDEA IN FORTALEZA, NDB HAS ALREADY ESTABLISHED ITSELF AS A MAJOR PLAYER IN SUPPORT OF ITS TARGET GROUP. IT HAS A SOUND  FINANCIAL FOUNDATION WHICH IS RECOGNISED BY MAJOR RATING AGENCIES. FITCH RATES NDB WITH “AA+” = OUTLOOK STABLE – FROM NEGATIVE IN 2023. S&P GLOBAL AFFIRMED ITS RATINGS OF NDB ON 10^TH OF MAY, 2024 AS “AA+/A-+”. UNLIKE SEVERAL WESTERN ECONOMISTS THAT DECLARE NDB “TOO SMALL” TO PLAY A MAJOR ROLE IN THE FINANCIAL SECTOR, THE “INTERNATIONAL BANKER” ACKNOWLEDGES ON ITS WEBSITE https://internationalbanker.com THAT NDB IS A REFLECTION OF DEVELOPING NATIONS BEING UNHAPPY WITH THE CURRENT SYSTEM. THIS DESIRE TO HAVE A FINANCIAL INSTITUTION THAT PUTS THE DEVELOPMENT OF EMERGING MARKETS INTO THE CENTER OF ITS OPERATIONS IS REFLECTED IN THE SERVICES OF NDB AND ITS TARGET MARKET: FINANCING SUSTAINABLE INFRASTRUCTURE AND OTHER SUSTAINABLE PROJECTS IN DEVELOPING COUNTRIES.

AND JUST LIKE MODERN TECHNOLOGY IS INTEGRATED IN THE DAY-TO-DAY OPERATIONS OF THE BANK, THIS MODERN TECHNOLOGY ALSO FORMS PART OF THE SERVICES OF THE BANK. INFORMATION AND COMMUNICATION TECHNOLOGY IS AT THE CORE OF PROJECTS FINANCED BY NDB.

BY THAT, WE GET TO THE POSITION OF NDB IN THE PRESENT AND THE OUTLOOK FOR THE FUTURE. GEOPOLITICALLY, THE WORLD IS MORE AND MORE DIVIDED INTO THE “DEVELOPED” NORTH AND THE “DEVELOPING” SOUTH. THIS POLITICAL DIVIDE IS MIRRORED IN THE ECONOMICAL SITUATION. THIS IS BECAUSE ECONOMY AND POLITICS  HAVE A DIALECTICAL RELATION, WHICH MEANS THAT ECONOMY DEPENDS ON POLITICS, AND VICE VERSA. NDB GETS MORE AND MORE REGOGNITION IN THE FINANCIAL AND POLITICAL WORLD, AS ELABORATED BEFORE IN VIEW OF THE RATING AGENCIES AND THE INTERNATIONAL BANKING SYSTEM. MEANWHILE, FOUR NEW COUNTRIES HAVE BECOME MEMBERS OF THE NDB IN 2021, NAMELY BANGLA DESH, EGYPT, AND URUGUAY AS BORROWING MEMBERS, AND THE UNITED ARAB EMIRATES AS NON-BORROWING MEMBER. THIS SHOWS THE GROWING ATTRACTION NDB AND ITS FINANCIAL STRATEGIES ENJOY IN THE EMERGING MARKETS. THIS GROWING ATTRACTION WILL SURELY LEAD TO A FURTHER EXPANSION, AS IT IS ALREADY INCORPORATED IN THE SECOND STRATEGY OF THE NDB 2022-2026.

OF COURSE, THERE ARE CHALLENGES AND DOUBTS FOR  POTENTIAL FUTURE MEMBERS OF NDB. THESE ARE BASICALLY THE SAME AS THEY ARE CONCERNING THE BRICS ORGANISATION. THE MOST IMPORTANT CONCERNS ARE THE ECONOMICAL AND POLITICAL INFLUENCE OF CHINA IN THE BANK, AND POSSIBLE INTERNAL CONFRONTATIONS BETWEEN NDB MEMBERS, LIKE CHINA AND INDIA. WE WILL LOOK AT THESE CONCERNS IN THE NEXT CHAPTER. APART FROM THAT, THERE ARE MORE TECHNICAL ISSUES WHICH I ADMIT, I CANNOT LOOK AT FURTHER, SIMPLY I LACK THE KNOWLEDGE TO COMMENT ON THOSE. BUT I AM SURE THAT THERE ARE PEOPLE WITHIN BRICS AND THE NDB WHO CAN SOLVE THESE ISSUES AS THEY APPEAR.

LINKAGE BETWEEN NDB AND BRICS

AS WE ALL MEANWHILE KNOW, THE BRIC ORGANISATION WAS FOUNDED BY BRAZIL, RUSSIS, INDIA, AND CHINA,  LATER JOINED BY SOUTH AFRICA TO BECOME BRICS. THE BRICS ORGANISATION THEN LAID THE FOUNDATION FOR NDB IN 2015, WHICH WAS THEN LAUNCHED IN 2016. AS THE FOUNDING MEMBERS OS BRICS AND NDB ARE THE SAME, THERE ARE SURELY LINKAGES BETWEEN BOTH.

BUT OF COURSE, THE LINKAGE BETWEEN BRICS AND NDB IS NOT REDUCED TO WHO FOUNDED WHOM. LINKAGES BETWEEN POLITICS AND ECONOMY ARE RECOGNISED BY MAINSTREAM WESTERN ECONOMISTS (POLITICAL ECONOMY!) AS WELL AS BY MARXIST ECONOMISTS.

POLITICAL ECONOMY IS DEFINED AS FOLLOWS:

 

Political economy is an interdisciplinary branch of the social sciences. It focuses on the interrelationships of individuals, governments, and public policy.

Political economists study how economic theories such as capitalism, socialism, and communism work in the real world. Any economic theory is a means of directing the distribution of a finite amount of resources in a way that benefits the greatest number of individuals.

o Political economy is an interdisciplinary branch of the social sciences. It focuses on the interrelationships of individuals, governments, and public policy.

Political economists study how economic theories such as capitalism, socialism, and communism work in the real world. Any economic theory is a means of directing the distribution of a finite amount of resources in a way that benefits the greatest number of individuals.

(INVESTOPEDIA: WHAT IS POLITICAL ECONOMY?)

HERE WE SEE ALREADY HOW ECONOMY IS RELATED TO POLITICAL SYSTEMS. OF COURSE, THE DEFINITION IS INCORRECT, AS FAR AS CAPITALISM, SOCIALISM, AND COMMUNISM ARE NO THEORIES (PERHAPS COMMUNISM, AS THERE IS NO COMMUNIST COUNTRY IN THE WORLD), BUT CAPITALISM AND SOCIALISM ARE POLITICAL SYSTEMS.

PERHAPS THE BEST KNOWN PHRASE CHARACTERISING THE RELATIONSHIP BETWEEN POLITICS AND ECONOMY IN A PRACTICAL WAY IS THE ONE ATTRIBUTED TO JAMES CARVILLE, ADVISOR TO BILL CLINTON IN THE ELECTORAL CAMPAIGN IN THE U.S.A. IN 1992: “IT’S THE ECONOMY STUPID.” (OFTEN, THIS SENTENCE IS WRITTEN AS “IT’S THE ECONOMY, STUPID.”) IT SHOWS HOW IMPORTANT ECONOMY IS CONSIDERED IN THE POLITICAL LIFE.

MARXISM-LENINISM SEES THE RELATIONSHIP BETWEEN POLITICS AND ECONOMY EVEN CLEARER, ALBEIT PERHAPS MORE DRASTCALLY IN THE DEFINITION OF DIALECTICAL MATERIALISM:

As a materialist philosophy, Marxist dialectics emphasizes the importance of real-world conditions and the presence of functional contradictions within and among social relations, which derive from, but are not limited to, the contradictions that occur in social class, labour economics, and socioeconomic interactions.^[3] Within Marxism, a contradiction is a relationship in which two forces oppose each other, leading to mutual development.^{[4]:  (WIKIPEDIA;; DIALECTICAL MATERIALIM)}

HERE WE SEE CLEARLY THAT BETWEEN POLITICS AND ECONOMY THERE IS A RELATIONSHIP BASED ON CONTRADICTIVE FORCES (MARX AND ENGELS MORE OR LESS LIMIT THESE CONTRADICTIVE FORCES TO POLITICAL CLASSES!) WHICH OPPOSE EACH OTHER OVER ECONOMICAL CONDITIONS.

AND EXACTLY THESE CONTRADICTIVE FORCES WE NOW HAVE GLOBALLY, NOT WITHIN ONE COUNTRY. AND THESE CONTRADICTIONS ARE NOT (YET) THOSE OF CAPITALISM AND SOCIALISM, BUT THOSE OF THE “DEVELOPED NORTH” AND THOSE OF THE “DEVELOPING SOUTH”.

THE BRICS NATIONS HAVE RECOGNISED THAT WITHOUT A SOUND FINANCIAL FOUNDATION, THE BEST POLITICAL CONCEPTS ARE LEADING TO NOTHING. FOR THE “DEVELOPED WEST”, THE U.S.A. PRACTISES THIS FOR A RATHER LONG TIME, PRACTICALLY SINCE THE END OF THE SECOND WORLD WAR. ONLY IN THE LAST YEARS, IT IS BECOMING MORE OBVIOUS. IN HIS FIRST TERM, TRUMP HAS INTRODUCED TARIFFS WHICH WERE CONTINUED UNDER THE BIDEN ADMINISTRATION. AND FOR HIS SECOND TERM, TRUMP PROMISED MORE AND HIGHER TARIFFS, NOT ONLY ON COUNYTIES WHICH ARE OPPOSED TO U.S.A. POLITICS, BUT ALSO ON ALLIES LIKE CANADA, THE EU AND MEXICO. MARTYNOV HAS REALISED THAT VERY WELL IN HIS ARTICLE “THE BRICS: PARADIGM SHIFT IN DEALING WITH NEW CHALLENGES”. HE POINTS OUT THAT THE AIM OF THE U.S.A. IS TO BE THE “POLICE OF THE WORLD”. HE CITES MOVEMENTS IN ECONOMIC AND POLITICAL ACADEMIC LITERATURE WHICH PROPOSES A “CIVILIZATION OF MODERNITY” WITH SEVERAL NEW CIVILISATIONS WHICH ARE “SUPERVISED” BY ONE WHICH IS MORE EQUAL THAN THE OTHERS – THE ANGLO-AMERICAN. THIS ASIDE: THE UNITED KINGDOM DOES NOT SEEM TO REALISE THAT THE ROLES HAVE BEEN REVERSED. THE  U.S.A. IS NO LONGER A COLONY OF THE UK, BUT IT IS THE OTHER WAY ROUND.

BUT BACK TO BRICS AND THE NDB: UNLIKE DOOMSAYERS HAVE SUGGESTED WHAT WILL HAPPEN AT THE LONG RUN, BOTH ORGANISATIONS HAVE SURVIVED, AND EVEN BECAME STRONGER IN THE LAST YEARS. FOR THE NDB, THIS IS SHOWN – AMONG OTHER SIGNS – BY THE JUDGMENT OF THE RATING AGENCIES, AND FOR BRICS BY THE ATTENTION THE LAST BRICS SUMMIT ENJOYED IN THE WESTERN MEDIA AND IN OTHER COUNTRIES THAT SHOWED INTEREST IN JOINING BRICS. PERHAPS THE MOST VALUABLE RECOGNITION OF BRICS AND THE NDB COMES FROM TRUMP HIMSELF WHO WARNED COUNTRIES THAT EXCHANGE THE DOLLAR WITH A BRICS CURRENCY WITH SERIOUS MEASURES. WELL, A BRICS CURRENCY IS NOT (YET) ON THE AGENDA, BUT WHAY IS ON THE AGENDA IS TRADE AMONG BRICS MEMBERS IN NATIONAL CURRENCIES. WHICH IS IN LINE WITH THE POLICY OF NDB TO INCREASINGLY DISBURSE LOANS IN NATIONAL CURRENCIES,

ALL THESE DEVELOPMENTS AND THE REACTIONS OF THE WESTERN MEDIA TO IT SHOW THAT DESPITE MANY CHALLENGES (FOR EXAMPLE DIFFERENT FORMS OF GOVERNMENT, DIFFERENT LEVELS OF DEVELOPMENT, MISUNDERSTANDINGS BETWEEN FOR EXAMPLE INDIA AND CHINA), BRICS AND THE NDB ARE ON THE RIGHT TRACK TO BECOME NAJOR PLAYERS IN THE POLITICAL AS WELL AS IN THE FINANCIAL SECTOR. ALWAYS KEEP IN MIND THAT BOTH ORGANISATIONS ARE RELATIVELY YOUNG, AND WHAT THEY HAVE ALREADY ACHIEVED IN THAT SHORT PERIOD OF TIME IS REMARKABLE.

CONDITIONS FOR  A MEMBERSHIP OF GHANA AND OTHER AFRICAN NATIONS IN BRICS AND NDB

AS THERE ARE CONDITIONS FOR ANY OTHER ORGANISATION, THERE ARE ALSO CONDITIONS FOR A MEMBERSHIP IN BRICS. MOST OF THESE CONDITIONS ARE BASED  ON THE GUIDING PRINCIPLES OF BRICS. TOGETHER THEY ARE CALLED THE “BRICS SPIRIT”, AND THEY ARE IN PARTICULAR:

MUTUAL RESPECT, UNDERSTANDING, SOVEREIGN EQUALITY, SOLIDARITY, DEMOCRACY, OPENNESS, INCLUSIVENESS, COLLABORATION, AND CONSENSUS.

MOST PEOPLE WON’T HAVE PROBLEMS WITH MOST OF THESE GUIDING PRINCIPLES, EXCEPT FOR ONE: THAT IS THE PRINCIPLE OF DEMOCRACY. ESPECIALLY IN THE WESTERN HEMISPHERE, COUNTRIES LIKE CHINA AND RUSSIA ARE CONSIDERED AN AUTOCRACY.

LET’S HAVE A LOOK AT CHINA FIRST. CHINA IS A SOCIALIST COUNTRY, BASED ON THE PRINCIPLES OF MARX AND LENIN. ACCORDING TO THESE PRINCIPLES, DEMOCRACY HAS A DIFFERENT DEFINITION FROM THE WESTERN INTERPRETATION.  REAL DEMOCRACY FOR MARXISM-LENINISM IS THE DEMOCRACY OF THE WORKING CLASS, LED BY THE PARTY OF THE WORKING CLASS, THE COMMUNIST PARTY. THIS KIND OF DEMOCRACY IS COMPLETELY DIFFERENT FROM THE DEMOCRACY IN THE WESTERN FORM, WHICH IS A DEMOCRACY OF THE CAPITALIST CLASS. IF WE ACCEPT THIS DIFFERENT INTERPRETATION OF DEMOCRACY – WHICH IS IN LINE WITH THE OTHER GUIDING PRINCIPLES -, THEN THERE IS REALLY NO PROBLEM WITH CHINA’S DEMOCRACY.

THE SITUATION IS A LITTLE BIT DIFFERENT  WITH RUSSIA, WHICH IS THEORETICALLY A DEMOCRACY IN THE WESTERN SENSE (THE “DUMA” IS THE RUSSIAN PARLIAMENT WITH VARIOUS PARTIES OCCUPYING SEATS IN IT), BUT FOR WESTERN IDEOLOGISTS IT IS ONLY PUTIN WHO HAS THE COMMAND IN RUSSIA, NOT THE PARLIAMENT AS “REPRESENTATIVES OF THE PEOPLE”. NEVERTHELESS, AS RUSSIA IS AT LEAST A DEMOCRACY IN THE FORMAL SENSE OF THE WORD, AND, ON THE OTHER HAND, BRICS AND THE NDB DON’T HAVE ANY PROBLEMS WITH THE STATUS OF RUSSIA, WE SHOULD ACCEPT THAT. FURTHERMORE, BOTH ORGANISATIONS ARE OPEN TO ANY KIND OF FORM OF GOVERNANCE; THEREFORE, WE CAN ARGUE THAT THE COMMITMENT TO DEMOCRACY AS A GUIDING PRINCIPLE IS MEANT AS DEMOCRACY WITHIN THE ORGANISATION. AND WITH THIS ONE, RUSSIA OBVIOUSLY DOES NOT HAVE ANY PROBLEMS.

THE GUIDING PRINCIPLES ARE THE MOST IMPORTANT CONDITIONS FOR A MEMBERSHIP IN BRICS. OTHERS – WHICH ARE SURELY CONNECTED WITH THE GUIDING PRINCIPLES – ARE AS FOLLOWS:

— COMMITMENT TO STRENGTHENING BRICS,

— BE AN EMERGING OR DEVELOPING COUNTRY WITH REGIONAL INFLUENCE,

— ALIGN WITH FOUNDING VALUES OF BRICS,

— HAVE DIPLOMATIC AND FRIENDLY RELATIONS WITH ALL MEMBERS OF BRICS,

— BEING COMMITTED TO SUPPORT REGIONAL AND INTERNATIONAL PEACE AND SECURUTY,

— SUPPORTING REFORM OF THE UNITED NATIONS AS AN ORGANISATION, AMONG OTHERS.

(FOR A COMPLETE OVERVIEW OF THE GUIDING PRINCIPLES, THE CONDITIONS FOR EXPANSION, AND THE PROCEDURE OF ACCEPTING NEW MEMBERS, GO TO http://www.brics.utoronto. ca)

GHANA – AS MANY OTHER AFRICAN NATIONS – WOULD SURELY FULFILL THE CONDITIONS FOR A MEMBERSHIP IN BRICS. GHANA IS COMMITTED TO SUPPORT REGIONAL AND INTERNATIONAL PEACE AND SECURITY, WHICH IS SHOWN BY THE LONG=LASTING CONTRIBUTION OF GHANA TO THE UNITED NATIONS PEACE KEEPING FORCE. GHANA SUPPORTS – ON ITS OWN AND THROUGH THE AFRICAN UNION – A REFORM OF THE UNITED NATIONS.AND GHANA IS A DEVELOPING COUNTRY WITH REGIONAL INFLUENCE – AS SHOWN BY RUNNING THE SECRETARIAT OF THE AFRICA CONTINENTAL FREE TRADE AREA. AS GHANA ALSO HAS DIPLOMATIC AND FRIENDLY RELATIONS TO ALL BRICS MEMBERS – OLD AND NEW – THERE SHOULD ALSO NOT FROM THIS SIDE ANY PROBLEMS FOR GHANA BECOMING A MEMBER OF BRICS.

WHAT ARE NOW THE ADVANTAGES AND THE DISADVANTAGES OF GHANA BECOMING A MEMBER OF BRICS AND THE NDB?

 

 

 

 

ADVANTAGES AND DISADVANTAGES FOR GHANA AND OTHER AFRICAN NATIONS OF AN NDB AND BRICS MEMBERSHIP

THE ADVANTAGES OF GHANA – AND OTHER AFRICAN NATIONS – IN  THE NDB ARE OBVIOUS. THEY WOULD GET BETTER FINANCING CONDITIONS FOR INFRASTRUCTURE AND OTHER SUSTAINABLE PROJECTS. AS I ALREADY MENTIONED, THERE WOULD EVEN BE THE POSSIBILITY OF GETTING LOANS IN THE LOCAL CURRENCY, WHICH WOULD MAKE THE COUNTRY LESS DEPENDENT ON DOLLAR-DENOMINATED FINANCIAL INSTRUMENTS. ONE DISADVANTAGE WOULD BE THAT GHANA HAS TO CONTRIBUTE TO FINANCING NDB, BUT THAT IS PROBABLY A PROBLEM THAT CAN BE SOLVED THROUGH NEGOTIATIONS.

THE MAJOR PROBLEM FOR MOST PEOPLE – AS MS  GYABAAH MENTIONED IN HER ARTICLE – IS WHETHER A MEMBERSHIP IN NDB AND BRICS WOULDN’T MAKE THE COUNTRY MORE DEPENDENT ON CHINA, AND THAT WOULD ONLY EXCHANGE THE DEPENDENCY ON ONE COUNTRY – THE U.S.A. – WITH THE DEPENDENCY ON ANOTHER – CHINA.

IN MY OPINION, THIS ARGUMENTATION MISSES THE REALITY ON THE GROUND. THERE ARE ESSENTIAL DIFFERENCES. AS ONE CONTRIBUTOR FROM A DEVELOPING COUNTRY – NOT CHINA! – PUT IT:  THE U.S.A IS WORRIED ABOUT ENEMIES, CHINA IS WORRIED ABOUT FRIENDS. WHEREVER THE U.S.A. GOES, TGERE IS DESTRUCTION. LIBYA, SYRIA, AND AFGHANISTAN ARE THE BEST EXAMPLES FOR THAT. THE CONFLICT BETWEEN RUSSIA AND UKRAINE IS IN THE FOREMOST INTEREST OF THE U.S.A., BECAUSE THE MILITARY INDUSTRY GAINS A LOT OF PROFIT FROM IT. THIS HAS BEEN THE CASE UNDER THE FIRST TRUMP ADMINISTRATION, WAS CONTINUED UNDER THE BIDEN ADMINISTRATION – PERHAPS WITH OTHER WORDS, BUT IN REALITY THE SAME OUTCOME – AND WILL CONTINUE EVEN STRONGER UNDER THE SECOND TRUMP ADMINISTRATION. ON THE OTHER HAND, CHINA IS MORE INTERESTED IN COOPERATION BETWEEN COUNTRIES. CHINA IS NOT INTERESTED IN MILITARY CONFLICTS, AND ONLY TRIES TO DEFEND THE ONE-CHINA POLICY, WHICH IS HISTORICALLY BASED, AGAINST THE U.S.A. AND SOME OF THEIR ALLIES IN SOUTH-EAST ASIA. AND EVEN IF CHINA WOULD USE ITS ECONOMIC STRENGTH FOR ITS OWN INTERESTS: AS LONG AS IT ALSO BENEFITS OTHER DEVELOPING COUNTRIES AND EMERGING MARKETS, I DON’T SEE ANYTHING WRONG WITH THAT.

OTHER CHALLENGES FOR BRICS, WHICH COULD CAUSE DISADVANTAGES FOR GHANA AND OTHER AFRICAN NATIONS, IS THE ARGUMENTATION THAT BRICS IS STILL STRUCTURALLY WEAK, AND WOULD NOT BE ABLE TO SURVIVE AT THE LONG RUN. THIS ARGUMENTATION WAS FROM THE BEGINNING ON THE SAME FOR THE NDB.

I BELIEVE THAT REALITY HAS OUTPACED THIS ARGUMENTATION.THIS IS ESPECIALLY OBVIOUS FOR THE NDB WHICH HAS BECOME FINANCIALLY MUCH STRONGER FROM THE 1^ST STRATEGY DOCUMENT 2017-2021 TO THE SECOND 2022-2026. THIS IS – AS I ALREADY MENTIONED – IN THE POSITIVE DEVELOPMENT IN THE RATINGS BY FITCH AND S&P GLOBAL. AND THIS ACCOUNTS ALSO FOR THE WHOLE BRICS ORGAINSATION. AS A YOUNG INSTITUTION WITH A LOT OF DIFFERENT APPROACHES WITHIN THE ORGANISATION, BRICS HAS ACHIEVED A LOT UNTIL TODAY. MANY COUNTRIES HAVE ALREADY JOINED BRICS AND THE NDB, OR SHOWN INTEREST IN  A MEMBERSHIP. INTERESTINLY ENOUGH, AMONG THOSE SHOWING INTEREST IS NIGERIA, A MEMBER OF THE MINT COUNTRIES, WHICH MS GYABAAH SHORTLY CONSIDERED AS POSSIBLE ALTERNATIVE TO BRICS, BUT ALSO DISMISSED IT BECAUSE OF WEAK ORGANISATIONAL STRUCTURE.

AS WE NOW FOUND OUT THAT THERE ARE MORE ADVANTAGES THAN DISADVANTAGES FOR GHANA IN JOINING BRICS, SHOULD GHANA COMPLETE THE STEP AND BECOME A MEMBER? LET’S FIND OUT IN THE CONCLUSION.

 

CONCLUSION

NOW THAT WE HAVE SEEN THE MAIN ADVANTAGES AND DISADVANTAGES FOR GHANA AND OTHER AFRICAN NATIONS TO JOIN BRICS AND NDB (I INTENTIONALLY LEFT ANY TECHNICAL CHALLENGES FOR BRICS AND NDB OUT, BECAUSE MY KNOWLEDGE ABOUT THAT IS NEAR TO ZERO. HOWEVER, I AM CONFIDENT THERE ARE ENOUGH ICT EXPERTS WITHN THE TWO INSTITUTIONS TO SOLVE THESE PROBLEMS), IS IT ADVISABLE FOR THESE COUNTRIES TO JOIN THEM NOW?

I CONCENTRATE MY ARGUMENTATION ON GHANA, AND ONLY REFER TO THE AFRICAN CONTINENT WHEN ITS SUITABLE FOR THE CONTENTS. I PERSONALLY DO NOT SEE AN PROBLEMS FOR GHANA TO APPLY FOR MEMBERSHIP IN NDB, BECAUSE THERE ARE ALMOST ONLY ADVANTAGES FOR GHANA. WE HAVE SEEN THE EXAMPLE OF URUGUAY WHICH IS A MEMBER OF NDB, BUT NOT OF BRICS. A LITTLE BIT MORE COMPLICATED IS THE QUESTION OF A FULL MEMBERSHIP IN BRICS+. I STRONGLY BELIEVE THAT THERE ARE TOO MANY INTERNAL PROBLEMS IN GHANA WHICH MUST BE SOLVED FIRST BEFORE THE CONCENTRATION ON A FULL MEMBERSHIP IN BRICS CAN BE FRUITFUL. THE LAST ELECTIONS HAVE IN MY  OPINION SHOWN THAT TWO MANY PEOPLE PUT THEIR OWN INTERESTS BEFORE THE INTERESTS OF THE COUNTRY (POSING AS AN INDEPENDENT CANDIDATE AFTER LOSING THE PRIMARIES, E.G.). ANY COOPERATION BETWEEN THE MAIN POLITICAL PARTIES IS MORE OR LESS NON-EXISTENT, AND ONLY SUCH A COOPERATION CAN BE OF BENEFIT FOR THE COUNTRY. YOU CANNOT CLEAN YOUR NEIGHBOURHOOD BEFORE CLEANING YOUR OWN HOUSE;

AN ALTERNATIVE FOR GHANA WOULD BE – AND I WOULD RECOMMEND THAT STRONGLY, NO MATTER WHICH GOVERNMENT IS IN POWER – TO BECOME AN “INTEREST NATION” IN BRICS.

BRICS HAS A FOUR STEP MEMBERSHIP EXPANSION PROCESS:

— AN INTERESTED COUNTRY,

— A PROSPECTIVE BRICS MEMBER STATE,

— AN INVITED BRICS MEMBER STATE, AND

— A BRICS MEMBER STATE.

DETAILS ABOUT THE PROCESS CAN BE DERIVED FROM “BRICS MEMBERSHIP EXPANSION GUIDING PRINCIPLES, STANDARDS, CRITERIA AND PROCEDURES”. HERE I WILL ONLY MENTION THE PROCEDURE TO BECOME AN INTERESTED COUNTRY.

 

“A country is considered interested when its Leader or Foreign Minister formally communicates its interest in becoming a new BRICS member state to the BRICS Chair,”

 

THIS APPROACH IS RATHER EASY TO PERFORM, AND CAN ONLY BE BENEFICIARY FOR THE COUNTRY. FROM BRICS, THE LEADERS OF THIS COUNTRY MIGHT EVEN LEARN HOW TO SOLVE PROBLEMS BETWEEN ORGANISATIONS WITH DIFFERENT KINDS OF LEADERSHIP. IT IS INTERESTING TONOTE THAT ACCORDING TO MY INFORMATION,

 

IN ALL WE CAN SAY THAT THERE IS WIDESPREAD INTEREST IN AFRICAN COUNTRIES TO BECOME MEMBERS IN BRICS, BUT WE MUST ALSO REALISE WHAT IS ELABORATED MAINLY IN THE SOUTH AFRICAN LITERATURE ON BRICS: EVEN WITHIN THIS ORGANISATION – AS POSITIVE AND FUTURE-ORIENTED IT MAY BE – AFRICA MUST LEARN TO SPEAK WITH ONE VOICE TO REPRESENT AFRICA’S INTERESTS ON THE WORLD STAGE – AND OF COURSE ALSO ON THE BRICS’S STAGE – BETTER.

PERHAPS THE AFRICAN UNION SHOULD APPLY FOR MEMBERSHIP IN BRICS…

 

REFERNCES:

AGREEMENT ON THE NEW DEVELOPMENT BANK, FORTALEZA, JULY 15, 2015;

NDB’S GENERAL STRATEGY: 2017-2021;

NEW DEVELOPMENT BANK GENERAL STRATEGY FOR 2022 TO 2026;

THE FUTURE OF GLOBAL PAYMENTS: BRICS PAY AND THE EVOLVING FINANCIAL ORDER;

IQBAL; BRICS AS A DRIVER OF GLOBAL ECONOMIC GROWTH AND DEVELOPMENT;

INTERNATIONAL MONETARY FUND; BRICS’ PHILOSOPHIES FOR DEVELOPMENT FINANCING AND THEIR IMPLICATIONS FOR LICS;

NO AUTHOR; THE BRICS;

MARTYNOV; THE BRICS: PARADIGM SHIFT IN DEALING WITH NEW CHALLENGES;

KATZENSTEIN P.; CIVILIZATION IN WORLD POLITICS, BOOK 1-3;

THE BRICS ALLIANCE: CHALLENGES AND OPPORTUNITIES FOR SOUTH AFRICA AND AFRICA

ON THE NEED OF MICRO AND SMALL BUSINESS OWNERS TO HAVE BASIC KNOWLEDGE OF BUSINESS MANAGEMENT

THERE ARE THOUSANDS AND THOUSANDS OF PEOPLE IN GHANA – AND PROBABLY ALL  OVER AFRICA – WHO WANT TO BE OWNERS OF MICRO AND SMALL BUSINESSES. EVEN THE HAWKERS IN THE STREETS OF ACCRA, KUMASI, OR ANY OTHER BIG CITY IN FACT RUN MICRO BUSINESSES.

THE PROBLEM IS THAT MOST OF THEM CONSUME THE MONEY THEY MAKE SOON  AFTER           THEY HAVE EARNED IT. I HAVE POINTED THAT OUT IN MY ARTICLE ON THE NEED OF MICRO AND SMALL BUSINESS OWNERS TO HAVE BASIC FINANCTAL KNOWLEDGE. THE FOUNDATION OF SOLVING THE PROBLEM OF CONSUMING TOO MUCH OF THE BUSINESS CAPITAL IS TO HAVE AT LEAST A SIMPLE ACCOUNTING. I WILL ELABORATE ON THIS FURTHER IN A DIFFERENT ARTICLE, BUT FOR NOW THE HINT IS ENOUGH THAT FOR THE START, YOU CAN USE A SIMPLE INCOME/EXPENSES SYATEM. IN THIS SYSTEM, YOU PUT THE INCOME FROM YOUR BUSINESS ON THE LEFT SIDE, AND THE EXPENSES ON THE RIGHT. AT THE END OF THE MONTH, YOU SUBTRACT ONE SIDE FROM THE OTHER. BY THAT, YOU WILL SEE WHETHER YOUR BUSINESS MADE A PROFIT OR A LOSS.

BUT THE FINANCIAL SIDE OF THE BUSINESS IS NOT THE ONLY PROBLEM OWNERS OF MICRO AND SMALL BUSINESSES FACE. MANY OF THEM LACK THE BASIC KNOWLEDGE OF BUSINESS MANAGEMENT, WHICH MIGHT LET THEM FAIL AT THE LONG RUN. BUSINESS MANAGEMENT COMPRISES OF FIVE COMPONENTS WHICH OVERLAP WITH ONE EACH OTHER IN A SUCCESSFUL BUSINESS WHATEVER THE SIZE. THESE FIVE COMPONENTS ARE PLANNING, ORGANISING, STAFFING, LEADING, AND CONTROLLING. EACH OF THESE COMPONENTS IS AS IMPORTANT AS THE OTHER FOR THE SUCCESS OF A BUSINESS, AND THE FOUNDATION OF ALL THESE COMPONENTS IS A COMPREHENSIVE BUSINESS PLAN.TO ELABORATE SUCH A BUSINESS PLAN IS NOT A ONE-TIME EVENT, BUT IT MUST BE REVISED EVERY NOW AND THEN THROUGHOUT THE LIFETIME OF THE BUSINESS, TO ADJUST IT TO REALITY. THERE MIGHT BE PROBLEMS WHICH YOU DID NOT SEE WHEN YOU FIRST WORKED ON THE BUSINESS PLAN, AND THEN YOU HAVE TO SEE HOW YOU CAN SOLVE THESE PROBLEMS. ALL THIS MUST BE DONE THROUGH THE BUSINESS PLAN. THERE ARE A LOT OF TEMPLATES ON THE INTERNET, AND IN MY COURSE “BASICS OF BUSINESS MANAGEMENT”, I HAVE POINTED OUT THE ONE WHICH – IN MY OPINION – IS THE BEST TEMPLATE FOR MICRO AND SMALL BUSINESSES. YOU CAN ACCESS THE COURSE BY PASTING THE FOLLOWING LINK INTO YOUR WEB BROWSER:

https://recklingenterprise.com/courses/basics-of-business-management/31

AT THE MOMENT, LESSON 4 OF THE COURSE – “STAFFING” – IS COMPLETED. LESSON 5 AND 6 – “ LEADING” AND “ CONTROLLING” – WILL BE COMPLETED WITHIN THE NEXT FOUR WEEKS. A SUMMARY WILL THEN FINALISE THE COURSE.

IF YOU HAVE MORE QUESTIONS, YOU CAN ALSO WHATSAPP ME ON +233200523362. I CAN SURELY ASSIST YOU WITH ANY PROBLEM YOU HAVE IN YOUR BUSINESS.

SEE YOU!

BEFORE WE DIG INTO THE MATTER AT HEART, WE MUST KNOW WHAT THE DIFFERENCE BETWEEN DIGITISATION AND DIGITALISATION IS:

 

Digitization converts analog info into digital form, while digitalization transforms processes using digital tech. Digitization is about converting information, while digitalization improves processes and creates new opportunities. (COURTESY OF BING)

 

SO, NO MATTER WHAT THE DIFFERENCE IS, BOTH WORDS HAVE TO DO WITH DIGITAL TECHNOLOGY. AND DIGITAL TECHNOLOGY IS THE ISSUE OF THE DAY. DIGITAL TECHNOLOGY APPEARS EVERYWHERE IN YOUR LIFE NOWADAYS. AND FOR WHATEVER SUBJECT YOU RESEARCH LITERATURE FOR SCHOOL OR WORK, YOU WILL COME ACROSS DIGITAL TECHNOLOGY. BIG COMPANIES, BANKS AND OTHERS, DEMAND KNOWLEDGE OF DIGITAL KNOWLEDGE AS A FOUNDATION FOR JOBS THEY OFFER. A GOOD EXAMPLE FOR THAT IS THE NEW DEVELOPMENT BANK – THE CENTRAL BANK OF THE BRICS COUNTRIES BRAZIL, RUSSIA, INDIA, CHINA, AND SOUTH AFRICA. IN ITS STRATEGY FOR THE YEARS 2022-2026, THE BANK DEDICATES A WHOLE CHAPTER TO EXPLAIN THE IMPORTANCE OF DIGITAL TECHNOLOGY FOR THE WORK IN THE BANK.

 

GHANA HAS STARTED TO IMPLEMENT DIGITAL TECHNOLOGY IN THE LIFE OF EVERYONE, AND THERE SHOULD BE NO WAY BACK. FINANCIAL INSTITUTIONS AND OTHER ENTERPRISES WOULD LOSE TJEIR COMPETITIVENESS WITHOUT TECHNOLOGY, AND THAT WOULD SURELY BE OF DISADVATAGE FOR THEIR BUSINESS.

 

OF COURSE, DIGITAL TECHNOLOGY CAN ONLY BE USED PROFITABLY, IF THE FOUNDATIONS FOR THIS ARE BUILT. THE INFRASTRUCTURE OF DIGITAL TECHNOLOGY MUST IMPROVE, SO THAT THE USE OF THE INTERNET AND OTHER SERVICES ASSOCIATED WITH DIGITAL TECHNOLOGY CAN BE GUARANTEED WITHOUT INTERRUPTION (REMEMBER THAT THE USE OF THE INTERNET IS WIDELY CONSIDERED AS PART OF HUMAN RIGHTS).

 

AND APART FROM THE TECHNICAL FOUNDATION FOR DIGITAL TECHNOLOGY, THERE IS THE NEED OF THE EDUCATIONAL SYSTEM TO BE REFORMED IN A WAY THAT DIGITAL TECHNOLOGY BECOMES THE BASE FOR TEACHING AND LEARNING IN SCHOOL FROM THE PRIMARY LEVEL ON. TEACHERS MUST BE EQUIPPED WITH KNOWLEDGE ABOUT TECHNOLOGY, SO THAT THEY CAN PASS THIS KNOWLEDGE OVER TO THEIR STUDENTS EFFICIENTLY. FURTHERMORE, SCHOOLS MUST BE SUPPLIED WITH MATERIALS AND DEVICES THAT ENABLE STUDENTS TO BECOME ACQUAINTED WITH DIGITAL TECHNOLOGY.

IN THE LAST WEEKS, I HAD SOME TECHNICAL PROBLEMS WITH MY WEBSITES, AND WEN I RE-CONSTRUCTED THE CONTENT, I REALISED THAT SOME LESSONS OF MY COURSES “BASICS OF BUSINESS MANAGEMENT” AND “FINANCING BASICS” GOT LOST DURING THE RE-CONSTRUCTION OF THE WEBSITES.

I APOLOGISE SINCERELY FOR ANY INCONVENIENCE CAUSED, AND I CAN ASSURE EVERYBODY THAT THE MISSING LESSONS WILL BE REPLACED IN THE COMING WEEKS.

 

STAY CONNECTED TO RECKLING ENTERPRISE!

 

MORE A FOREWORD: AS USUAL WITH MY COURSES, THIS ONE ALSO DOES NOT GO DEEP INTO THEORY OF BUSINESS MANAGEMENT, ALTHOUGH THEORY PRINCIPALLY PLAYS AN IMPORTANT PART OF BUSINESS MANAGEMENT. THIS COURSE SHOULD GIVE NEW WOULD-BE ENTREPRENEURS SOME HINTS WHAT TO DO IN MANAGING THEIR BUSINESS, AND WHAT THEY JAVE TO EXPECT.

BEFORE WE START GETTING INTO DETAILS, WE NEED TO KNOW WHAT BUSINESS MANAGEMENT IS.

MANAGEMENT OR MANAGING IS

the process of coordinating and overseeing the activities of an organization to achieve its goals

(COURTESY OF BING)

WHERE BUSINESS IS ANY ECONOMIC ACTIVITY.

WE SEE THAT BUSINESS MANAGEMENT IS NOT A ONE-TIME APPEARANCE, BUT A PROCESS THAT LASTS AS LONG AS THE ECONOMIC ACTIVITY EXISTS.

THE PROCESS “BUSINESS MANAGEMENT” IS IN ITSELF DIVIDED INTO FIVE COMPONENTS WHICH THEMSELVES ARE PROCESSES. THESE COMPONENTS ARE:

— PLANNING,

— ORGANISING,

— STAFFING,

— LEADING, AND

— CONTROLLING.

THESE FIVE COMPONENTS DO NOT EXIST SEPARATED FROM EACH OTHER, BUT THEY ARE USUALLY OVERLAPPING. THAT MEANS THAT ONE OF THE COMPONENTS COMES INTO ACTION WHILE OTHERS ARE ALREADY ACTIVE. FOR EXAMPLE, YOU MIGHT BE PLANNING A NEW PART OF YOUR BUSINESS WHILE YOU ARE CONTROLLING THE EXISTING ONES. OR YOU MIGHT BE STAFFING A NEW PART OF YOUR BUSINESS WHILE YOU ARE LEADING THE EXISTING STAFF OF YOUR BUSINESS.

TO BE A SUCCESSFUL MANAGER, YOU MUST FOLLOW THESE FIVE COMPONENTS OF BUSINESS MANAGEMENT IN THEORY AND PRACTICE. IN THE NEXT LESSONS, WE WILL LOOK AT EACH COMPONENT MORE THOROUGHLY.

 

 

AND NOW TO THE QUESTIONS:

• DEFINE IN YOUR OWN WORDS WHAT MANAGEMENT IS.
• WHAT CAN BE MANAGED?
• HOW CAN BUSINESS BE DEFINED?
• WHAT ARE THE FIVE COMPONENTS OF BUSINESS MANAGEMENT?
• GIVE TWO EXAMPLES HOW YWO COMPONENTS OF BUSINESS MANAGEMENT CAN OVERLAP.

THE NEXT LESSON WILL BE PUBLISHED BEGINNING OF NEXT WEEK.

 

ACCOUNTING PLAYS AN IMPORTANT ROLE IN ORGANISING YOUR BUSINESS. WITHOUT A PROPER ACCOUNTING, YOUR BUSINESS MIGHT COLLAPSE WITHIN THE FIRST YEAR OF EXISTENCE.

WELL, I KNOW THAT MOST PEOPLE BECOME AFRAID WHEN THEY HEAR THE WORD “ACCOUNTING”. THEY ASSOCIATE THE ITEM WITH DOUBLE-ENTRY ACCOUNTING, CALCULATING DEPRECIATION, AND OTHER HORROR IMAGINATIONS.

BUT FOR YOU AS OWNER OF A MICRO OR SMALL BUSINESS, THAT DOES NOT NEED TO BE THE CASE, AT LEAST NOT FOR THE BEGINNING. WHEN YOUR BUSINESS GROWS, YOU MIGHT NEED TO OCCUPY YOURSELF WITH ISSUES LIKE SPROGRAMMES ON THE INTERNET. OR YOU CAN USE SOME GUIDES OF HOW TO USE MICROSOFT EXCEL FOR ACCOUNTING PRACTCES.

BUT LET US GET BACK TO THE START OF OUR ACCOUNTING. FOR THE BEGINNING, IT IS SURELY ENOUGH TO USE A SIMPLE INCOME/EXPENSES METHOD TO SEE AT THE END OF THE MONTH WHETHER YOUR BUSINESS MADE A PROFIT AT THE END OF THE MONTH, OR A LOSS.

YOU MAKE A LIST WHICH UOU SEPARATE INTO THREE PARTS UP DOWN. ONE SMALLER PART ON THE LEFT IS RESERVED FOR THE DATE, THE NEXT PART WILL SHOW THE INCOME (KEEP IN MIND THAT YOUT INITIAL WORKING CAPITAL IS YOUR FIRST INCOME). THE INCOME MUST CONTAIN THE AMOUNT YOU RECEIVED, AND FOR WHAT YOU RECEIVED IT THE LAST COLUMN IS FOR THE EXPENSES AND MUST CONTAIN THE AMOUNT OF EXPENSES AND FOR WHAT. FOLLOWING IS A SAMPLE:

 

DATE	INCOME (IN GHC)	EXPENSES ( GHC)I
1ST JANUARY 2025	10,000 INITIAL WORKING CAPITAL	2,500 RENT
2ND JANUARY 2025		5,000 PURCHASE OF GOODS FOR SHOP (SPECIFY)
3RD JANUARY 2025	1,575 SALES OF GOODS ON THAT DAY (SPECIFY; GHC 500 PROFIT)
	AND SO ON	AND SO OM
TOTAL JANUARY 2025	TOTAL INCOME AT THE END OF JANUARY	TOTAL EXPENSES AT THE END OF JANUARY
TOTAL JANUARY	INCOME MINUS EXPENSES

 

GOOD AND EXACT PLANNING IS ESSENTIAL FOR EVERY SUCCESSFUL BUSINESS. WITHOUT THOROUGH PLANNING, YOUR BUSINESS IS SURELY ABOUT TO FAIL. BUT LET US FIRST OF ALL LOOK HOW BUSINESS PLANNING IS DEFINED:

Planning is the primary function of management that involves formulating a future course of action for accomplishing a specific purpose. Planning enables managers to decide what task to do, how to do the task, when to do the task and by whom the task has to be done.

AND TO ACHIEVE A PLSNNING WHICH BENEFITS YOUR BUSINESS, YOU WILL NEED A BUSINESS PLAN.

A business plan is a roadmap for your business. It outlines your goals, strategies, and how you plan to achieve them. It’s a living document that you can update as your business grows and changes.

(COURTESY wisebusinessplans.com)

BUT NOBODY EXPECTS YOU TO WRITE A BUSINESS PLAN JUST LIKE THAT. YOU WILL NEED GUIDANCE HOW TO WRITE SUCH A BUSINESS PLAN. AND THERE ARE LOTS OF TEMPLATES TO BE FOUND ON THE INTERNET. IN MY OPINION, ONE OF THE BEST TEMPLATES IS THE PRINCE’S TRUST BUSINESS PLAN PACK. YOU CAN DOWNLOAD IT HERE:

BUSINESS_PLAN_2015.pdf (ctfassets.net)

WHEN YOU WRITE SUCH A BUSINESS PLAN – NO MATTER WHERE YOU TAKE THE TEMPLATE FROM – YOU MUST BE AWARE THAT SUCH A BUSINESS PLAN IS NOT A ONE-TIME EVENT. AS MUCH AS YOUR BUSINESS EVOLVES OVER TIME, THE BUSINESS PLAN HAS TO DO THE SAME. THAT MEANS THAT YOU HAVE TO REVIEW YOUR BUSINESS PLAN REGULARLY TO SEE WHETHER IT STILL REFLECTS REALITY, OR WHETHER YOU REALISED CHANGES FOR YOUR BUSINESS THAT NEED A CHANGE IN YOUR BUSINESS PLAN.

YOU SEE THAT THE BUSINESS PLAN’S PURPOSE IS NOT ONLY FOR EXTERNAL USE – THAT MEANS IF YOU WANT TO APPLY FOR A LOAN, OR YOU ARE LOOKNG FOR AN INVESTOR – BUT IT IS ALSO IMPORTANT FOR YOU PERSONALLY.

JUST LIKE THE BUSINESS PLAN MUST BE REVISED REGULARLY, YOUR OWN BUSINESS MUST BE REVIEWED THE SAME. KEEP IN MIND THAT THE BUSINESS IS NOT A STATIC EVENT, BUT YOUR BUSINESS HAS SOMETHING LIKE A “LIFE”. IT CAN ONLY EXIST IF IT IS FED REGULARLY WITH NEW DATA, CONFRONTED WITH NEW SITUATIONS THAT NEEDS SOLUTIONS.THEREFORE, IF YOU WANT TO START A BUSINESS, YOU MUST BE READY TO COMMIT YOURSELF COMPLETELY TO START AND ESPECIALLY DEVELOP THE BUSINESS.

LASTLY, IT MUST BE SAID THAT PLANNING CAN NOT BE SEEN ISOLATED FROM OTHER COMPONENTS OF BUSINESS MANAGEMENT. ESPECIALLY CONTROLLING – AS WE WILL SEE IN ONE OF THE NEXT LESSONS – FORMS AN INSEPARABLE ALLIANCE WITH PLANNING.?

 

 

AND NOW TO THE QUESTIONS:

• IN YOUR OWN WORDS: WHAT IS PLANNING A BUSINESS?
• WHY IS PLANNING A BUSINESS A PROCESS?
• WHAT FUNCTIONS DOES A BUSINESS PLAN HAVE?
• WHAT COULD PREVENT YOU FRON COMMITTING YOURSELF COMPLETELY TO YOUR BUSINESS? (EXAMINE YOURSELF)
• GIVE AN EXAMPLE HOW PLANNING AND CONTROLLING OVERLAP.

 

BEFORE WE GO INTO THE DETAILS WHAT ROLE ORGANISING PLAYS IN BUSINESS MANAGEMENT, WE WILL FIRST OF ALL LOOK AT THE DEFINITION:

Organizing in management is a pivotal function that produces the harmonious collaboration of human efforts and resources, aligning them purposefully to achieve set objectives. It entails structuring, grouping, and coordinating resources – be it finances, materials, machinery, or manpower – to work collectively toward a particular goal.

(COURTESY OF BING)

ACTION WITHOUT PLANNING IS FATAL, BUT PLANNING WITHOUT ACTION IS FUTILE, AN OLD BUSINESS MANAGEMENT SAYING TELLS US. THAT IS BECAUSE EVEN IF YOU HAVE THE NICEST PLAN FOR YOUR BUSINESS, IT WON’T BE WORTH ANYTHING IF YOU WON’T PUT YOUR PLAN INTO REALITY. AND THE BEGINNING OF THIS REALITY IS TO ORGANISE YOUR UPCOMING BUSINESS. YOU HAVE A GOAL WHICH – ACCORDING TO YOUR PLAN – YOU WANT TO ACHIEVE, AND NOW YOU MUST START TO MAKE IT THE REALITY YOU WANT IT TO BE.

AS WE SEE FROM THE DEFINITION, ORGANISING YOUR BUSINESS MEANS THAT YOU GATHER ALL RESOURCES YOU HAVE AND MAKE THEM WORK FOR YOUR BUSINESS EFFICIENTLY. TO ACHIEVE THIS, YOU HAVE TO LAY OUT AN ORGANISATIONAL STRUCTURE; THIS ORGANISATIONAL STRUCTURE CAN ALREADY BE PART OF THE BUSINESS PLAN WHICH WE DISCUSSED IN AN EARLIER LESSON. THERE ARE MANY EXAMPLES FOR ORGANISATIONAL STRUCTURES ON THE INTERNET (FOR EXAMPLE 7 Organizational Structure Types (With Examples) – Forbes Advisor ), JUST CHECK IT OUT.

LET ME GIVE YOU AN EXAMPLE FOR ORGANISING YOUR BUSINESS:

LET’S ASSUME YOU WANT TO OPEN A SHOP SELLING BABY ARTICLES. YOU HAVE A SHOP IN A VERY GOOD AREA (REMEMBER: LOCATION, LOCATION, LOCATION IS ONE OF THE MOST IMPORTANT ISSUES RUNNING A SHOP). YOU HAVE ENOUGH CAPITAL TO PURCHASE GOODS TO SELL, AND YOU HAVE ONE EMPLOYEE (IT MIGHT BE ADVISABLE TO HAVE A FEMALE EMPLOYEE, AS YOU WANT TO SELL BABY ARTICLES; MOST OF THOSE ARTICLES MIGHT BE BOUGHT BY WOMEN, AND THEY MIGHT TRUST A FEMALE EMPLOYEE MORE THAN A MALE; YOUR BUSINESS IS NO SPACE FOR GENDER EXPERIMENTS).

NOW YOU MUST FIND THE BEST SUPPLIER FOR THE GOODS YOU WANT TO SELL. GET OFFERS FROM VARIOUS SUPPLIERS, AND COMPARE THE OFFERS. REMEMBER THAT THE CHEAPEST OFFER IS NOT ALWAYS THE BEST. THERE ARE MANY OTHER MATTERS  THAT PLAY A ROLE WHEN CHOOSING YOUR SUPPLIER, E.G. DELIVERY TIME FOR GOODS SUPPLIED, REPLACEMENT OF SPOILT OR OUTDATED GOODS, ETC,  IT MIGHT ALSO BE THAT YOU NEED MORE THAN ONE SUPPLIER, DEPENDING ON THE RANGE OF ITEMS YOU INTEND TO SELL. IN ONE SENTENCE: BE VERY CAREFUL AND THOROUGHFUL WHEN CHOOSING YOUR SUPPLIER(S).

MAKE ALSO SURE THAT YOUR INVENTORY IS UP-TO-DATE, AND THAT THERE ARE ALWAYS ENOUGH GOODS IN YOUR SHOP. FIND OUT HOW MUCH TIME IT TAKES FOR YOUR SUPPLIER TO DELIVER NEW ITEMS, AND ORDER THESE NEW ITEMS IN TIME.

THE SAME ACCOUNTS GENERALLY FOR YOUR EMPLOYEE. WELL, NOW THAT YOU FOUND A RELIABLE AND LOYAL EMPLOYEE (WE DISCUSS THE MATTER OF STAFFING IN A LATER LESSON), YOU MUST DISCUSS THE WORKING HOURS WITH HER. THE WORKING HOURS FOR YOUR EMPLOYEE MIGHT NOT BE IDENTICAL WITH THE OPENING HOURS OF THE SHOP, ESPECIALLY IF YOU INTEND TO BE PRESENT IN YOUR SHOP YOURSELF, IF YOU HAVE MONEY ENOUGH TO EMPLOY MORE THAN ONE STAFF, YOU MIGHT EVEN OPT FOR  SHIFTS. YOU MUST GIVE EVERY EMPLOYEE A JOB DESCRIPTION WHICH DEFINES EXACTLY THE ROLE THE EMPLOYEE WILL PLAY IN YOUR BUSINESS.

ORGANISING ACCOUNTING IS VERY CRUCIAL FOR YOUR BUSINESS. WITHOUT A PROPER ACCOUNTING, YOU MIGHT FACE A LOSS IN YOUR BUSINESS SOONER THAN LATER, AND THEN A BANKRUPTCY OF YOUR BUSINESS MIGHT NOT BE FAR AWAY.

WHEN YOU LOOK AT THE DEFINITION OF ORGANISING IN MANAGEMENT, YOU MIGHT THINK THAT IT IS VERY COMPLICATED. WELL, IT CAN BE COMPLICATED, BUT WE CAN TAKE INTO CONSIDERATION THAT YOUR BUSINESS IS A RATHER SMALL ONE, AND ORGANISING IT IS NOT TOO COMPLEX. IT WON’T TAKE MUCH OF YOU TO ARRANGE THE COOPERATION BETWEEN THE VARIOUS PARTS OF YOUR BUSINESS. THAT IN MIND, YOU MUST BY ALL MEANS HAVE A CLEAR VIEW THAT ALL THE COMPONENTS OF YOUR BUSINESS ARE DOING THEIR CONTRIBUTION FOR THE SUCCESS OF YOUR BUSINESS. HABING A SMALL OR MICRO BUSINESS DOES NOT MEAN THAT IT SHOULD BE ORGANISED BADLY, OR EVEN NOT AT ALL ORGANISED.

ALSO KEEP IN MIND THAT ORGANISING YOUR BUSINESS IS NOT ISOLATED FROM THE OTHER PARTS OF BUSINESS MANAGEMENT. AS WE HAVE DEALT WITH PLANNING BEFORE, THERE IS ALWAYS A CONNECTION BETWEEN ORGANISING AND PLANNING. IF YOU SEE ANY MISHAPS IN THE COOPERATION OF THE VARIOUS PARTS OF YOUR BUSINESS, YOU MUST ALWAYS PLAN HOW TO MAKE IT BETTER.

 

AND NOW TO THE QUESTIONS:

• WHAT IS THE MAIN PURPOSE OF ORGANISING IN MANAGEMENT?
• WHY IS IT NECESSARY TO HAVE AN ORGANISATIONAL STRUCTURE FOR YOUR BUSINESS?
• GIVE EXAMPLES FOR ORGANISATIONAL STRUCTURES!
• WHY IS ACCOUNTING IMPORTANT IN ORGANISING IN MANAGEMENT?
• HOW ARE PLANNING AND ORGANISING CONNECTED IN BUSINESS MANAGEMENT?

 

COMPARED WITH THE OTHER FOUR COMPONENTS OF BUSINESS MANAGEMENT, STAFFING MIGHT NOT BE EASIER TO ACCOMPLISH, BUT IT IS AT LEAST EASIER TO UNDERSTAND. HERE IS FIRST OF ALL THE DEFINITION:

An effective staffing process helps you find and retain strong candidates who are a good fit for your organization. More specifically, you can keep refining your staffing. Successful programs establish a continuous system of evaluating and developing your relationship with employees and selecting for qualities that are most effective. Ideally, the process of staffing can help you find great employees and maintain strong relationships with them.

DEFINITION IS COURTESY OF INDEED

OF COURSE, THE BASIC ASSUMPTION FOR EFFECTIVE STAFFING IS THAT YOU WILL NOT RUN YOUR BUSINESS ALONE, BUT THAT YOU TAKE ONE OR MORE EMPLOYEES.

THE FIRST STEP TO FIND THE SUITABLE EMPLOYEE FOR YOUR BUSINESS IS TO INTER VIEW CANDIDATES. YOU MIGHT FIND THESE CANDIDATES AMONG YOUR FRIENDS AND ACQUAINTANCIES, OR YOU MIGHT PUT AN ADVERTISEMENT IN LOCAL AND/ OR SOCIAL MEDIA.

WHEN ONE OR MORE CANDIDATES HAVE CONTACTED YOU FOR THE JOB, WE WILL GET TO THE INTERVIEWS. BUT BEFORE YOU START THE INTERVIEWS, IT IS ADVISABLE TO DEVELOP A SO-CALLED “QUESTIONNAIRE”. A QUESTIONNAIRE IS A LIST OF QUESTIONS WHICH YOU CONSIDER IMPORTANT TO FIND THE RIGHT EMPLOYEEYOU’RE YOUR BUSINESS. BASIC QUESTIONS SHOULD BE THOSE FOR AGE AND EDUCATION LEVEL. FOR SOME JOBS, IT MIGHT ALSO BE NECESSARY TO KNOW WHETHER THE CANDIDATE – NO MATTER WHETHER FEMALE OR MALE – IS MARRIED AND HAS CHILDREN, OR – ANOTHER ADRA OF IMPORTANCE – HOW THE CANDIDATE’S KNOWLEDGE OF THE ENGLISH LANGUAGE IS. OTHER QUESTIONS MOSTLY DEPEND ON THE KIND OF JOB YOU WANT TO HAVE AN EMPLOYEE FOR.

BUT MOST IMPORTANTLY – AS YOU CAN ALSO SEE FROM THE DEFINITION – YOU MUST BE ABLE TO ESTABLISH A POSITIVE RELATIONSHIP WITH YOUR FUTURE EMPLOYEE. BE CAREFUL: DON”T MISUNDERSTAND A POSITIVE RELATIONSHIP AS LEADING TO AN INTIMATE RELATIONSHIP WITH YOUR FUTURE EMPLOYEE! AN INTIMATE RELATIONSHIP COULD LEAD TO AN INCORRECT JUDGMENT OF THE EMPLOYEE’S HANDLING OF YOUR BUSINESS.

SO, WHAT IS A POSITIVE RELATIONSHIP THEN? THERE ARE FOUR PARTS THAT CONSTITUTE A POSITIVE RELATIONDHIP. THESE ARE:

— MUTUAL RESPECT,

— TRUST,

— COOPERATION, AND

— UNDERSTANDING.

IN PRINCIPLE, THESE FOUR SHOULD CONSTITUTE THE BASIC OF EVERY RELATIONSHIPL UNFORTUNATELY, THEY DO NOT. MOREOVER, THEY ARE EXTREMELY IMPORTANT IN AN EMPLOYER-EMPLOYEE RELATIONSHIP,THE EMPLOYER MUST SHOW RESPECT TO HIS EMPLOYEE (AND VICE VERSA), AND ONLY WITH A TRUSTFUL COOPERATION BETWEEN THE TWO THE BISINESS WILL BE SUCCESSFUL FOE THE MUTUAL BENEFIT OF THE TWO.

AND NOW TO THE QUESTIONS:

• WHEN – ACCORDING TO THE DEFINITION – WILL A STAFFING PROCESS BE EFFECTIVE?
• IN WHAT WAYS CAN YOU LOOK FOR CANDIDATES FOR A JOB IN YOUR BUSINESS?
• WHAT SHOULD YOU PREPARE BEFORE THE INTERVIEWS WITH THE CANDIDATES?
• WHAT ARE THE BASIC QUESTIONS IN EVERY JOB INTERVIEW?
• WHAT ARE THE FOUR COMPONENTS OF A POSITIVE RELATIONSHIP BETWEEN EMPLOYER AND EMPLOYEE?

THE NEXT LESSON WILL FOLLOW SOON – WATCH OUT!

 

IN THIS COURSE, WE HAVE FIRST OF ALL LEARNT THE DIFFERENCES BETWEEN DEBT FINANCING AND EQUITY FINANCING. THE MAIN WAY OF DEBT FINANCING OCCURS IF YOU TAKE A LOAN FROM A BANK, THE MAIN WAY OF EQUITY FINANCIN OCCURS IF YOU TAKE AN INVESTOR – WHETHER PASSIVE OR ACTIVE – AS A PARTNER INTO YOUR BUSINESS.

THERE ARE SEVERAL ORGANISATIONS IN GHANA APART FROM BANKS WHICH GIVE OUT LOW-INTEREST LOANS – OR EVEN GRANTS – MAINLY TO START-UP BUSSINESSES. ON THE OTHER HAND, THERE ARE ALSO ORGANISATIONS OF SO-CALLED “ANGEL INVESTORS” THAT WOULD INVEST IN SMALL AND MEDIUM ENTERPRISES, ALSO FOR START-UP BUSINESSES.

THERE ARE ADVANTAGES AND DISAVANTAGES FOR BOTH FORMS OF FINANCING. ONE ADVANTAGE OF DEBT FINANCING IS THAT IS THAT IT IS MORE SHORT TERM THAN EQUITY FINANCING, ONE DISADVANTAGE – ESPECIALLY IN GHANA – IS A HIGH INTEREST RATE FOR LOANS. ONE ADVANTAGE OF EQUITY FINANCING IS THAT YOU DOM’T NEED TO PAY ANT INTEREST, AND THE RISK IS SHARED. ONE DISADVANTAGE IS THAT YOU GIVE AWAY PART OF YOUR BUSINESS, AS LONG AS THE BUSINESS EXISTS.

AT THE LONG RUN, WHETHER YOU PREFER DEBT FINANCING OR EQUITY FINANCING DEPENDS ON THE NATURE OF YOUR BUSINESS, AND ESPECIALLY ON YOUR OWN RISK PROFILE. WHETHER YOU ARE READY TO TAKE A BIG RISK OR YOU ARE A LOW-RISK TAKER, ONE THING YOU MUST DO BY ALL MEANS: YOU MUST ANALYSE YOUR INTENDED BUSINESS, WHETHER AS OBJECTIVELY AS POSSIBLE THE BUSINESS WILL BE SUCCESSFUL.