Enforce saving culture
by Precious Majola
2009-07-03 12:05
Dear Editor,
There have been attempts by academics and policy makers to understand the nature of savings in South Africa. One side argues that the nature of family structures especially in black community where extended families are common.
You often find bread winners are limited in large part because many are unemployable especially the baby boomers. The immediate impact is, if a student in a family completes his/here degree instead of creating his wealth base at young age he/she must support the whole family.
You have to deposit monthly stipend to your parents and at the same time you have to repay your loan because many parents don't have education policies for their children. The most common reason is low salary which does not leave scope for savings.
On the other hand, some have argued that black elite or so-called black diamonds lives are luxurious and often time supported by high debt intake.
While this might be true but it only applies to the minority of the group. Overall, the culture of saving should be inherited or learned and also practiced phenomenon. The month of July is a saving month where many corporations deploy their employees in varies primary schools to teach and encourage kids to save.
Perhaps we have not stated the importance of saving. The country that is not saving adequately relies on foreign inflows which are volatile and could potentially create volatility in the currency.
Secondly, studies in economics have established that low saving rates is associated with low economic growth and ultimately low employment. The synonym of low saving rate is high debt rate and the challenge with a debt is you disadvantage the future generation by passing negative wealth.
Precious Majola
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