Many South Africans still battle to manage their finances, the SA Savings Institute (Sasi) said on Wednesday (04/07/2012).
"South Africans still count on the state or [a] neighbour to bail them out of their financial woes,” Sasi chairwoman Prem Govender said at the launch of Sasi’s savings month campaign in Johannesburg.
She said South Africans needed to take charge of their lives by saving.
"The current domestic economic situation, with slow growth and inflation at the top of its band, has exposed South Africans’ vulnerabilities in terms of their income, expenditure, savings and debt.”
Household savings as a percentage of disposable income had fluctuated between 2.7 percent in 1991 and -0.2 percent in the first quarter of 2012.
"Debt servicing hit a high at 81 percent in 2008 and continued to remain this high. South Africa is also the third worst of all countries surveyed when it comes to speaking to our children about money,” Govender said.
South Africa’s gross savings rate was 20 percent of gross domestic product in 2011/12, compared to China’s of 54 percent, India’s of 34.7 percent and Russia’s of 24.7 percent.
"The more South Africans save as a nation, the more we can finance our own debt, thus decreasing our reliance on fickle foreign investment and increasing the resilience of our economy.”
Govender drew attention to initiatives announced by Finance Minister Pravin Gordhan in his 2012 budget speech.
"We welcome the strategy to introduce tax-exempt short and medium term savings products to encourage more consumers to manage their levels of debt and develop a strong culture of savings.”
She said every South African should be able to access affordable financial services, such as bank accounts and insurance.
Sasi had made July savings month, with the theme of "Save Now”.
The institute unveiled its first savings and investment expo in South Africa, which was intended to bring all financial sector parties together under one roof.
National Treasury deputy director-general Ismail Momoniat said on Wednesday growth and jobs were not emphasised enough in the saving process.
"Once a person has a job and gained independence by earning a salary they can begin to save, but if you don’t have money you are not going to save.”
He said it was important to make sure enough jobs were generated in South Africa. - Sapa