Old Mutual Urges Malawians to Embrace Savings Culture
Old Mutual has urged Malawians to save amid tough economic times, citing financial freedom, writes Mercy Matonga.
Lilongwe, Malawi - Old Mutual has urged Malawians to save amid tough economic times, citing financial freedom, writes Mercy Matonga.
The investment and pension scheme company's Group Head of Financial Education, John Manyeke, made the call in Lilongwe during a media symposium Old Mutual organised to drill journalists on the subject amid economic challenges rocking the global and local economies.
"There is a bedrock of financial education in the world, but unfortunately it is not as intense on the African continent, especially given high levels of unemployment, inequality, and poverty; due to high levels of illiteracy," said Manyeke.
"I think it is very critical to have all members of society play their roles, as there is no single institution that can pool this on its own."
Manyeke said for saving culture to be effective, there was a need for financial literacy in order for members of the general public to be making informed financial decisions.
He added that recognising value in investment would enable people to protect themselves from economic and financial shocks and avert stress related to financial well-being.
He pointed out that the deaths of single breadwinners in most families result in hardships due to the absence of investment.
Gross savings in Malawi were reported at 10.96% in 2019, according to the World Bank collection of development indicators.
A hindrance to saving is inflation and rates of interest as economists explain.
Ok if you leave the money in a sock in the house it loses value quicker than if you put the money in an interest paying savings account. But the savings account still loses the value of money if inflation is greater than the interest rate.
African governments have a history of not taking inflation seriously. This seems to be changing for the better. But currency instability importing inflation where currency loses value against the dollar is still a bug problem and disincentive to saving.
People will tend to buy something that retains value against inflation rather than save the money.