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Let’s nurture a savings culture for a great future

by kenya-tribune

Cancelled happiness is what comes to mind whenever one thinks about the topic of saving. The word saving itself conjures up images of waiting in line, unnecessary delays and frankly, denial.

It is painful to have to subject oneself to the misery of deprivation. This idea could be why saving is not a topic one is keen to have with anyone, let alone with oneself.

As a country, Kenya recorded a gross savings rate of 13.3 per cent in December 2021 and has remained range-bound between the years 2006 and 2021. This rate is much lower than the global savings rate, which is in the region of 24.0 per cent.

 Kenya’s predicament is not an isolated one. 

Only one African country, Angola, made it to the top-10 list of top savers in 2021 at 33.6 per cent. Singapore recorded the highest gross savings rate at 44.2 per cent while Namibia recorded the lowest savings rate at 6.7 per cent. Typically, gross savings is calculated as gross national income less total consumption plus net transfers.

Increased national savings support new investments, a positive current account and the production of new capital goods, all of which are positive for economic growth. For countries like Singapore, demographics, high per capita income and a fully funded pension system have been noted to influence savings positively. 

From a personal perspective, saving is downright painful, at least in the short-run. It is a treacherous uphill climb that most fortunate people take. It means dodging the ever-present social media pages of strangers, acquaintances and friends who are seemingly making it big time. The more they spend, the happier they get, it seems. It’s little wonder that saving, more often than not, takes a back seat.

Start small

Saving for the future, to invest in higher-yielding opportunities, or the proverbial better tomorrow, is our best bet, both as individuals and as a country. We can start small, today. 

If, as individuals, we put aside a small amount of money regularly, the battle would be half-won. Consistency is the name of the game. A tidy sum accumulated over time can come in handy in case of an emergency. It can go a long way in the purchase of more expensive items and reduce or fully eliminate debt, especially consumer debt. The key is to change our attitude towards saving and view it as a treat or even a reward for good behaviour that supports our dreams and stands by us in our worst of times; God forbid.

The recently launched Hustler Fund comes quickly to mind, specifically its attempt to enhance credit access with a savings plan. A remarkable attempt at instilling a savings culture in the least expected way. 

Of the five per cent savings portion, the fund takes a shot at seeing to it that 30 per cent goes into short-term saving while 70 per cent goes into long- term saving (pension saving). This is a step in the right direction but without a doubt, more can be done. Little by little, we can build a strong foundation on which we can construct a colossal tower, figuratively. 

Ms Karimi is a certified financial analyst.

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