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COVID-19: The Economic and Social Impact on Ocean Islands

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Covid-19 world

By Kester Kenn Klomegah

Understandingly, it has become important to analyze the spread of coronavirus and its impact on the economy of small islands especially Cape Verde, Mauritius, Maldives, Seychelles, Vanuatu and the Union of Comoros. These islands, which are favorite tourist posts and foreign investors, have also closely diverse geopolitical relationship with the world.

 It comes into spectacular focus for this research study, although in general, the islands seem to have the lowest cases of the pandemic, and efforts taken in preparedness against the disease, and the possible effects on their economies and sociocultural lives of the population. Part of the research and monitoring is presented here in three headings as follows: (i) The Islands and Coronavirus: An Overview, (ii) Economic Impact of Coronavirus on these Islands and (iii) Current Scenarios and Lessons for the Future.

The Islands and Coronavirus: An Overview

The coronavirus disease appeared first in 2019 in Wuhan city in China. The disease was, first identified in Wuhan and Hubei, both in China early December 2019. The original cause still unknown but its symptoms include high body temperature with persistent dry cough and acute respiratory syndrome. Some medical researchers say it is a pneumonia-related disease.

Late December 2019, Chinese officials notified the World Health Organization (WHO) about the outbreak of the disease in the city of Wuhan in China. Since then, cases of the novel coronavirus – named COVID-19 by the WHO – have spread around the world. WHO declared the outbreak to be an international health concern only on 30 January, and then recognized it as a “pandemic” on 11 March 2020.

The basic transmission mechanisms of the coronavirus are the same worldwide. But the speed and pattern of spread definitely varies from country to country, urban to rural and place to place. It depends on cultural practices, traditional customs and social lifestyles. A densely populated township can have a different trajectory to a middle-class suburb or a village. The epidemic can spread differently and among nomadic peoples.

There have been claims that this coronavirus may not likely survive in hot countries due to the tropical climate in these regions, yet cases of this virus are already confirmed in these tropical countries. There are officially confirmed coronavirus cases on the islands of Cape Verde, Mauritius, Maldives and Seychelles.

On the Cape Verde, about 300 miles (483 kilometers) off the west coast of Senegal, consists of 10 islands and five islets, all but three of which are mountainous. The island has a total of 55 reported cases among its half a million population, according to the Cape Verde’s Public Health National Institute.

Mauritius is a very small island far away from China – and yet greatly affected by the coronavirus. Mauritius is a country reliant on tourism. The sector accounts for roughly a quarter of the Gross Domestic Product (GDP). Since the first three case investigated and confirmed on 18 March, Mauritius now has 324, including 65 recoveries and 9 death, according to the Health Ministry.

On 15 April 2020, no new cases were reported, three patients who recovered from the coronavirus agreed to donate their blood through Plasmapheresis, according to the official coronavirus website of the Health Ministry.

Maldives, officially referred to as the Republic of Maldives, is a small island in South Asia, located in the Arabian Sea of the Indian Ocean. Its population, one of the most geographically dispersed, is nearly 400,000 and the island attracts many foreign tourists throughout the year.

The disease got to Maldives on 7 March 2020 from an Italian tourist who had returned to Italy after spending holidays in Kuredu Resort & Spa. Thereafter, the Health Protection Agency of the Maldives confirmed two more cases in the Maldives, both employees of the resort. Following this, the hotel was closed down, several tourists stranded on the island.

On 27 March, the government announced the first confirmed case of a Maldivian citizen with COVID-19, a passenger who had returned from the United Kingdom. And that brought the total number of confirmed cases in the country to 16; there are other 15 foreign citizens. Thus, in April the figured climbed to 28 cases.

Seychelles, located in the Indian Ocean, reported its first two cases on 14 March. The two cases were people who were in contact with someone in Italy who tested positive. On 15 March, a third case arriving from The Netherlands was confirmed, and the next day, there were four confirmed cases, visitors from The Netherlands. As at 20 April, there are only 11 confirmed cases and two patients quickly recovered and have been released.

Vanuatu is a Pacific island country located in the South Pacific Ocean. It is east of northern Australia, nearer to New Guinea, Solomon and Fiji islands. Vanuatu has a population of approximately 250,000. All these islands’ mainstays of the economy are agriculture and tourism. They attract tourists throughout the year. As of 3 April 2020, it has no coronavirus but still vulnerable, if strict measures are not adopted. It, however, continues its surveillance.

There are five public hospitals, and one private hospital with 27 health centers located across the islands and more than 200 aid posts in more remote areas. The two major referral hospitals are located in Port Vila and Luganville in the country.

The Union of Comoros, an island nation to the east is Mozambique and northwest is Madagascar in the Indian Ocean, gained independence from France on 6 July 1975. In mid-2017, Comoros joined the Southern African Development Community (SADC) with 15 other regional member states. The Comoros share mostly African-Arab origins. It economic activities are the same as other ocean islands.

On 17 April, Chief Epidemiologist, Dr. Izzy Gerstenbluth, indicated that 269 people have been tested so far, 106 men and 163 women. The number of confirmed cases is still at 14 as the official counted figure. One has died, one is still in the hospital, 10 are safe and three are active. 18 are being actively monitored and 12 are still in quarantine because they returned to the island after the measures were announced

The Medical & Health Affairs Department (G & Gz) of the Ministry of Health, Environment and Nature (GMN) keeps a close eye on how the new coronavirus spreads and behaves worldwide. The G & Gz team is in direct contact with Curaçao Airport Partners (CAP), Curaçao Tourist Board (CTB), Curaçao Hospitality and Tourism Association (CHATA), the Analytical Diagnostic Center (ADC), Curaçao Medical Center (CMC) and Department of Immigration.

Here are the aforementioned coronavirus figures: Cape Verde (55), Mauritius (324), Maldives (28), Seychelles (11), Vanuatu (0) and the Union of Comoros (14), it would be erroneous to attribute tourism as the key reason for comparatively high numbers of cases in Mauritius. Of course, more Chinese are attracted there so as South Africans. There is propensity that the figures may not rise as the island governments have also taken strict control measures.

Economic Impact of Coronavirus on these Islands

The already weak capacity of health care system on these four islands – Cape Verde, Mauritius, Maldives, Seychelles, Vanuatu and the Union of Comoros – is likely to exacerbate the pandemic and its impact on their economies. These islands’ coronavirus disease burden is not so different from each other. But in each case, the key factor is the economic models and what these mean for this circumstance.

As an example, Maldives took an admirable step in the health sector. The Maldivian government turned the resort island of Villivaru in the Kaafu Atoll into a quarantine facility, described as “the world’s first coronavirus resort”, where patients would enjoy a luxurious stay and free medical care. According to Minister of Tourism, Ali Waheed, the Maldives had 2,288 beds available for quarantine as of late March 2020.

Obviously, other economic implications of the coronavirus are detrimental not only to public health systems but to trade and travel industry. On all the islands, small-scale agriculture that includes fishing, local industries as well as retail markets are largely affected. More than 80% of people in rural areas depend on subsistence farming for survival; however, restrictions on market activities would limit market access.

It is worth to say that both agriculture and fishing in these islands are conducted at subsistence level and for small-scale exports. Seafood is very popular and resultantly export of seafood is curtailed. The Maldives’ economy is dependent on tourism, which dropped severely due to travel restrictions amid the pandemic. Experts warned of an economic contraction and possible difficulties paying back foreign debt, especially to China.

Specifically, it is estimated that the shutdown implemented to control the pandemic costs the Mauritian economy about 5% of the country’s GDP for the full 15-day lockdown announced by government on 20 March. Later, there was sanitary curfew started on 23 March and was extended up to 15 April 2020. Now, the lockdown was again extended till 4 May to further contain the spread of the COVID-19 in Mauritius.

As already known, Cape Verde, Mauritius, Maldives, Seychelles, Vanuatu and the Union of Comoros depend mostly on the travel industry. Due to the outbreak of this coronavirus, all these governments have imposed restrictions on travel to the islands that have the best climate and attractive beaches. Travel restriction imposed, thus paralyzing tourism industry in all the four islands.

The Government of Maldives and the Tourism Ministry of the Maldives with the guidance of the Health Protection Agency of the Maldives (HPA) placed a temporary travel restriction for the following countries to control new cases. Since then, there are no passengers (traffic) originating from, transiting to or with a travel history of said country/province is to be permitted into the Maldives. Maldivians and spouses of Maldivians who are foreign nationals are allowed in, but subject to observe quarantine measures.

The Cape Verdean authorities have closed all sea borders and stopped internal flights between the islands. Travelers are required to comply with any additional screening measures put in place by the authorities. As a further step, the government has declared a state of emergency for the whole country until 17 April, the details of which can be found here (in Portuguese). This has activated a series of measures including significant restrictions on movement nationally and internationally.

However, all citizens have been instructed to remain at home unless they needed to carry out the following activities. These are: (i) to buy food or other essential items, (ii) to go to work if unable to work from home, (iii) to go to hospital or health centers, (iv) to carry out caring or similar duties or in case of real need, and (v) to walk pets. Cape Verde’s Public Health National Institute pledged to help in cases of emergency.

Since the beginning of March, the Mauritian authorities have been conducting ‘Contact Tracing’: people who have been in contact with infected patients have been placed under quarantine, including doctors, nurses and police officers.

Seychelles banned any person from Seychelles from travelling to China, South Korea, Italy and Iran. These countries have high cases. An exception is made for returning residents, under similar rules taken by Cape Verde, Mauritius and Vanuatu.

The most significant remittances to Cape Verde, Mauritius, Maldives, Seychelles, Vanuatu and the Union of Comoros as a source of financial stability come from the islanders who work as temporary laborers around the world, disappeared. The Union of Comoros depends heavily on remittances. For instance, there are between 200,000 and 350,000 Comorians in France. Official statistics are hard to find especially most of the government sources and international organizations become inaccessible for required information.

There have been a steady development or facelift in the cities over the past years. A substantial process of urbanization is still unfolding in Cape Verde, especially to the cities of Praia and Mindelo. The same trend city;mso-bidi-font-weight:bold’>s development and expansion in Mauritius, Maldives, Seychelles, Vanuatu and the Union of Comoros.

Beyond all the points raised above, Dr Antipas Massawe, a former lecturer from the Department of Chemical and Mining Engineering, University of Dar-es-Salaam in Tanzania, East Africa, strongly insisted that “the scale of the challenges facing the health sector is tremendous, it requires extensive investment of resources and governments have to direct focus on the sustainable solutions.”

Charles Prempeh, a lecturer in Africana Studies at the African University College of Communications (AUCC), and a doctoral candidate at University of Cambridge, also explains in an email that there are deficiencies – ranging from poor health policies through inadequate funding of health infrastructure to training and research – that have characterized the health sector in Africa. Ocean islands have similar pitfalls or problems.

Amid the fast spreading coronavirus in some regions, it is simply providential that the African continent has not recorded high numbers, compared to the so-called western countries. But it is also true that even with the relatively smaller number of cases that most countries in Africa have recorded, there are deep-seated doubts that the health system can match squarely with the debilitating effect of the virus, as they have come under disproportionate strain, according to him.

“The current situation is serious setback,” both academics acknowledged. But further suggested that small island governments draw a long term development plan, make consistent efforts at mobilizing resources for realizing – support for education, health and employment generating sectors, – the Sustainable Development Goals (SDGs).

Current Scenarios and Lessons for the Future

It is time for solidarity, to fight the end the global health mess. The key lessons for epidemic response are to act fast but act locally. That is exactly what Cape Verde, Mauritius, Maldives, Seychelles, Vanuatu and the Union of Comoros are focusing on now.

But as the international response gains momentum, some financial assistance may be extended to these islands. The islands hospitals need testing kits, basic materials for hygiene, personal protective equipment for the professional health workers, and equipment for assisted breathing. There is a global shortage of all of these and a shameful scramble among developed countries to get their own supplies – relegating Cape Verde, Mauritius, Maldives, Seychelles, Vanuatu and the Union of Comoros to the backyard.

The islands absolutely have no pharmaceutical companies to produce the needed medicaments. The medical supplies, equipment and whatever have to be imported from the United States and Canada, Europe, Asian countries such China and India.

Media reports said Mauritius and Seychelles had received a few tons of medicine including thousands of hydroxychloroquine tablets from India to help in their fight against COVID-19. Hydroxychloroquine is an anti-malarial drug being used by some doctors to treat COVID-19 patients, though its efficacy is still being tested. Mauritius and Seychelles are favorite tourist posts, and have long-time close geopolitical relationship with India.

The COVID-19 epidemic is currently forcing governments to cut agricultural expenses and prioritize health-related expenditures. This will heavily affect the economy in the future if the restrictions continue, and further expected to bring additional economic hardship in the nearest future to these poor ocean islands. More than 80% of people in rural areas depend on subsistence farming for survival, restrictions on market activities would limit market access.

Repeat: Most of these people derive their livelihoods from the informal economy, small-scale farming, open market trading, livestock keeping and fishing. Workers in the formal sector have low incomes. Only a few of them have social security, and some may not even have saving accounts. This means with the lockdown, they are likely and adversely affected.

The above scenarios complicate the situation for poor people, who have little resources or insurance to cushion the social and economic impact of the pandemic. These small islands are, indeed, in a quagmire both, at the state level and the individual. While much depends on post-pandemic internal policies directed at transforming the economy, strategies to expand practical collaboration with foreign partners, the islands still have to keep good diplomatic relationship with the world. Nevertheless, global leaders have called for a comprehensive approach to mobilizing support for least developed countries, and so it is time to show absolute solidarity with Cape Verde, Mauritius, Maldives, Seychelles, Vanuatu and the Union of Comoros.

Kester Kenn Klomegah is Special Representative of the Russian Trade and Economic Development Council on interaction with Africa. He is also an independent research writer on African affairs in the EurAsian region and former Soviet republics.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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BRICS Can Boost Ghana’s Economic Status

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BRICS Countries

By Kestér Kenn Klomegâh

With heightening of geopolitical interest in building a new Global South architecture, Ghana’s administration has to consider joining the ‘partner states category’ of BRICS+, an association of five major emerging economies (Brazil, Russia, India, China and South Africa). The National Democratic Party (NDC) and the elected President John Mahama, while crafting future pathways and renewing commitments over democracy and governance, designing a new economic recovery programme as top priority, could initiate discussions to put Ghana on higher stage by ascending unto BRICS+ platform.

Certainly, ascending unto BRICS+ platform would become a historical landmark for Ghana which has attained prestigious status in multilateral institutions and organizations such as the Economic Community of West Africa States (ECOWAS), the African Union (AU), the United Nations and also from Jan. 2025 has become the head of the Commonwealth Secretariat.

Unlike South Africa, which has acquired a full-fledged membership status in 2011, and Ethiopia, Nigeria and Uganda were taken into the ‘partner states’ category, Ghana has all the fundamental requirements to become part of BRICS+ alliance. It is necessary to understand the basic definition and meaning of BRICS+ in the context of the geopolitical changing world. The BRICS alliance operates on the basis of non-interference. As an anti-Western association, it stays open to mutual cooperation from countries with ‘like-minded’ political philosophy.

BRICS members have the freedom to engage their bilateral relations any external country of their choice. In addition to that, BRICS+ strategic partnership has explicitly showed that it is not a confrontation association, but rather that of cooperation designed to address global challenges, and is based on respect for the right of each country to determine its own future.

South Africa and other African countries associated with BRICS+

South Africa is strongly committed to its engagement in the BRICS+. It has, so far, hosted two of its summits. In future, Egypt and Ethiopia would have the chance to host BRICS+ summit. Egypt and Ethiopia have excellent relations with members, and simultaneously transact business and trade with other non-BRICS+, external countries.

The New Development Bank (BRICS) was established in 2015, has financed more than 100 projects, with total loans reaching approximately $35 billion, and it is great that the branch of this bank operates from Johannesburg in South Africa. Understandably, South Africa can be an investment gateway to the rest of Africa. In 2021, Bangladesh, Egypt, the United Arab Emirates and Uruguay joined the NDB.

The BRICS Bank works independently without any political strings, and has further pledged financial support for development initiatives in non-BRICS+ countries in the Global South. Its tasks include investing in the economy through concessional loans, alleviating poverty and working towards sustainable economic growth. According to President of the BRICS New Development Bank, Dilma Rousseff, “The bank should play a major role in the development of a multipolar, polycentric world.”

Ethiopia and Egypt are the latest addition to BRICS+ association from January 2024. South Africa and Egypt being the economic power houses, while Ethiopia ranks 8th position in the continent. In terms of demography, Nigeria is the populous, with an estimated 220 million people while Uganda has a population of 46 million. South Africa, Ethiopia and Egypt are full members, Algeria, Nigeria and Uganda were offered ‘partner states’ category, but have the chance to pursue multi-dimensional cooperation with external countries. BRICS+ has absolutely no restrictions with whom to strike bilateral relationship.

From the above premise, Ghana’s new administration, within the framework of BRICS+, could work out a strategic plan to establish full coordination with and request support from African members, including South Africa, Egypt and Ethiopia. Worth noting that membership benefits can not be underestimated in this era of shifting economic architecture and geopolitical situation.

Queuing for BRICS+ Membership

Burkina Faso, Mali and Niger which historically sharing the cross-border region of West Africa, are in the queue to ascend into the BRICS+ association. The trio has formed their own regional economic and defense pact, the Alliance of Sahel States (AES) in Sept. 2023, and aspiring for leveraging unto BRICS+, most likely to address their development and security questions. Brazil, as BRICS 2025 chairmanship, has set its priority on expansion of BRICS+, the enlargement wave began by Russia. More than 30 countries are the line join, hoping for equitable participation in bloc’s unique activities uniting the Global South.

Perhaps, the most crucial moment for Ghana which shares border with Burkina Faso. Its military leader, Capt. Ibrahim Traoré was heartily applauded for attending the inauguration of the new President John Dramani Mahama on January 7th. Burkina Faso, without International Monetary Fund (IMF) and World Bank, is transforming its agricultural sector to ensure food security, building educational and health facilities and sports complex which turns a new chapter in its political history.

In early January 2025, the National Democratic Congress (NDC) took over political power from the New Patriotic Party (NPP). Historically, the political transition has been quite smooth and admirable down the years. Ghana was ranked seventh in Africa out of 53 countries in the Ibrahim Index of African Governance. The Ibrahim Index is a comprehensive measure of African governments, and methods of power transfer based on constitutional principles, rules and regulations.

Ghana produces high-quality cocoa. It has huge mineral deposits including gold, diamonds and bauxites. it has approx. 10 billion barrels of petroleum in reserves, the fifth-largest in Africa. President John Dramani Mahama, has reiterated to unlock the potentials, creating a resilient and inclusive economic model that would empower citizens and ultimately attracts foreign investments. Ghana reduced size of government, a required condition to secure funds from the IMF for development and resuscitating the economy. Ghana’s involvement in BRICS+ will steadily enhance the dynamics of its traditional governance in multipolar world.

Outlining Ghana’s potential benefits

Currently, Ghana has myriad of economic tasks to implement, aims at recovering from the previous gross mismanagement. It could take advantage of BRICS+ diverse partnership opportunities. Closing related to this, Ghana’s headquarter of the African Continental Free Trade Area (AfCFTA) further offers an appropriate collaboration in boosting further both intra-BRICS trade and intra-Africa trade. With Egypt, Ethiopia, Uganda, South Africa, Nigeria and Ghana, these put together paints an African geographical representation in BRICS+, and presents their collective African voice on the international stage.

After studying the article report titled “Ghana Should Consider Joining the BRICS Organization” (Source: http://infobrics.org), the author Natogmah Issahaku, explained, in the first place, that  Ghana’s relations with other external nations, particularly, those in the West, will not, and should not be affected by its BRICS membership. According to the expert, Ghana needs infrastructural development and sustainable economic growth in order to raise the living standard of Ghanaians to middle-income status, which could be achieved through participation in BRICS+. In return, Ghana can offer BRICS+ members export of finished and semi-finished industrial and agricultural products as well as minerals in a win-win partnership framework.

As an Applied Economist at the University of Lincoln, United Kingdom, Natogmah Issahaku emphasized the importance of the BRICS New Development Bank (NDB), that could play roles by financing Ghana’s development agenda. BRICS development cooperation model is based on equality and fairness, Ghana can leverage its relations to optimize potential benefits. Given the colossal scale of economic problems confronting the country, President Mahama should take strategic steps to lead Ghana into the BRICS+ without hesitation.

Notwithstanding world-wide criticisms, BRICS+ countries have advanced manufacturing and vast markets as well as technological advantages. As often argued, BRICS+ is another avenue to explore for long-term investment possibilities and work closely with its stakeholders.

These above-mentioned arguable factors are attractive for advancing Ghana in the Global South. Based on this, it is time to grab the emerging opportunity to drive increasingly high-quality cooperation, focus on hope rather than despair and step up broadly for more constructive parameters in building beneficial relations into the future! Over to the new government of President John Mahama, the estimated 35 million people and the Republic of Ghana.

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Dangote Refinery is Disrupting European Markets—OPEC

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Dangote refinery petrol production

By Adedapo Adesanya

The Organisation of the Petroleum Exporting Countries (OPEC) has noted that the increased production of petroleum products by the Dangote Petroleum Refinery has reduced the importation of refined products from Europe.

In its latest Monthly Oil Market Report, the cartel said the refining efforts of the Lagos-based 650,000-barrel-per-day refinery have changed the narrative.

Business Post reports that Dangote Refinery commenced European distribution this month, as it aims for 100 per cent production.

“The ongoing operational ramp-up efforts at Nigeria’s new Dangote refinery and its gasoline exports to the international market will likely weigh further on the European gasoline market.

“Continued gasoline production in Nigeria, a country that has relied heavily on imports to meet its domestic fuel needs in the past, will most likely continue to free up gasoline volumes in international markets which will call for new destinations and flow adjustments for the extra volumes going forward,” the report partly read.

OPEC added that European light distillates continue to lose ground on the back of increasingly lighter and sweeter refinery crude diets in Europe and sanctioned Russian crude imports, leading to stronger naphtha production.

“The resulting naphtha surplus coupled with the declining petrochemical cracking capacity in Europe has weighed on the regional naphtha market.”

The 650,000 barrels per day Dangote oil refinery built by Nigerian billionaire, Mr Aliko Dangote, in Lagos, had affirmed to compete with European refiners when operating at full capacity.

Although, when it started operations last year, it struggled to secure sufficient crude locally — as production remains below target and tied to contracts with other players by the Nigerian National Petroleum Company (NNPC) Limited.

“We have gone up to 550,000 barrels per day, that is 85 per cent capacity in crude distillation,” Mr Devakumar said in December.

The refinery was forced to source crude from international markets following a dispute with the Nigerian state oil firm, the NNPC, over a crude supply deal under which Dangote Group had agreed to sell a 20 per cent stake in the refinery to NNPC for $2.76 billion.

In December 2024, on the back of the crude-for-Naira scheme, the volume of black gold supplied to the Lagos-based facility went 40 per cent higher to 395,000 barrels per day than the 280,000 barrels per day delivered in November.

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Tether Relocates Entity, Subsidiaries to El Salvador

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Tether

By Adedapo Adesanya

Stablecoin issuer, Tether Holdings Limited, will move its corporate entity and subsidiaries to El Salvador after securing a digital asset service provider (DASP) license in the Central American nation.

According to a statement on Monday, this marks a step in Tether’s journey to foster global Bitcoin adoption banking on El Salvador’s history with cryptocurrency.

“This strengthens Tether’s position in one of the world’s most forward-thinking markets and fosters the development and implementation of cutting-edge solutions more efficiently in a dynamic environment where innovation thrives. It underscores the company’s dedication to leveraging Bitcoin’s transformative potential as it drives growth in emerging markets,” the statement said.

The company said El Salvador is rapidly establishing itself as a global hub for digital assets and technology innovation.

“By embracing blockchain technology and digital currencies, El Salvador is fostering an ecosystem that encourages innovation and attracts investment in the broader financial and technology sectors.

“This strategic positioning is helping to shape the future of financial systems, making the country a key player in the global fintech landscape,” Tether added.

Speaking on this, Mr Paolo Ardoino, CEO of Tether said, “This decision is a natural progression for Tether as it allows us to build a new home, foster collaboration, and strengthen our focus on emerging markets.

“El Salvador represents a beacon of innovation in the digital assets space. By rooting ourselves here, we are not only aligning with a country that shares our vision in terms of financial freedom, innovation, and resilience but is also reinforcing our commitment to empowering people worldwide through decentralized technologies.”

As it takes these next bold steps, the company looks forward to working closely with El Salvador’s government, businesses, and communities to shape the future of financial technology.

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