Citizens don’t save - Old Mutual

Namibians broadly respect the need for adequate savings to take care of themselves in the long term, but the burden of everyday household expenses, the depreciating effect of inflation and an ingrained belief in children taking care of their parents are challenges to a stronger savings culture. This according to the latest Old Mutual Namibia Savings and Investment Monitor (SIM), an annual study that aims to shed light on working citizens’ saving and investment behaviour. The 2014 study surveyed 400 people, 50% of whom were from Windhoek, 25% from Walvis Bay and Swakopmund, and the other 25% from Oshakati and Ondangwa. Revealing the results at a dinner in Windhoek last week, Old Mutual Namibia CEO Gim Victor said that 30% of those surveyed showed no interest at all in investing, while 91% of respondents argued that their children would look after them when they were old. The survey found that 73% of respondents at least made use of a savings account – considered a typical entry-level product in the banking market. “Although Namibians demonstrate optimism towards savings, it is also important to understand what drives their savings objectives,” Victor told those in attendance. “Seventy-seven percent of Namibians indicated that their top priority is provision for education. In South Africa this is much lower at 54%, but in Nigeria it is even higher at 78%,” he said. “Looking at the reasons why people tend to save less, it is clear that saving and investment reserves are cannibalised by normal household and education expenses and the depreciating effect of inflation,” he added. Victor said it was noteworthy that 58% of Namibians named obtaining property in the next five years as a current financial goal, but noted worrying low levels of citizens belonging to retirement provisions (16%) or provident funds (34%).