KwaZulu-Natal MEC for Finance, Ina Cronje,, has encouraged individuals especially young people to save no less than 15 percent of their income.
“It is a indisputable fact that 75 percent of South Africans have insufficient retirement savings. The sad reality is that some people do not manage to retire at all and find themselves facing severe financial shortfalls once they reach retirement age, with far too little in the way of savings to maintain their lifestyle,” Cronje said.
She pointed out that the low rate of saving and the escalating debt of citizens with the hope of accomplishing their aspirations instantly have serious consequences not merely for the individual’s financial stability, but also for the provincial initiatives to achieve sustainable economic growth.
The provincial government, via the Provincial Treasury, has prioritised educating citizens when it comes to practical ideas on how to manage their finances.
The initiative has seen the province asking players from both the financial services sector and the private sector to come to the table and play its role via the KZN Financial Literacy Association, championed by Cronje, in assisting individuals to make financially-sound choices.
“As a result of this association, the government and private sector are dealing with financial illiteracy head-on… this initiative involves several educational programmes targeting the citizenry, starting at school level, as a way to build a savings culture in the province.
“A savings culture needs to be inculcated in all the citizens, young and old, individuals simply cannot live like there is no tomorrow, we have to save for rainy days, a high savings rate would allow our province to fulfill investment requirements, causing us to be less reliant on volatile short-term capital inflows for funding, which can easily be reversed and pose risks of instability for an emerging economy like ours,” said Cronje.
She mentioned that although the country is officially out of the recession, its savings rate of 16 percent is significantly lower than that of other prosperous countries, even in Africa.
“KwaZulu-Natal’s economic growth of 3.13 percent in 2010 is worrisome indeed but given where we were a year ago there is an improvement, however it is not at the level where we would like it to be or even at a level where we are able to generate adequate and descent jobs.”
The national government a short while ago launched the National Savings Month (July), with the goal and objectives to encourage citizens to ‘save today; for themselves and their country.