Tag Archives: savings

Secure your future and save 15 percent of your income

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.

 

MEC for Finance Ina Cronje

 

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.

Source: BuaNews

Share

Pravin Gordhan rethinks economic transformation

Finance Minister Pravin Gordhan

In order to meet the ambitious target of developing the overall economy by seven percent per annum, Finance Minister Pravin Gordhan suggests the country will need to redefine its economic transformation strategy.

“All of us would need to redefine economic transformation. We have been in simple terms mimicking precisely what the previous elite did … all of us choose to wear precisely the same attire and drive precisely the same cars. Where is the social conscience of the new elite?” asked Gordhan, who was addressing the Investment Forum of the Association of Black Securities and Investment Professionals Student Chapter (ABSIP) at Wits University.

During the past year, the minister explained that South Africa’s GDP required a growth of seven percent to be able to really transform the overall economy. On Monday, the minister for a second time remarked that the South African economy simply cannot afford to grow somewhere between three and five percent.

“All of us need to develop a different model of growth,” he mentioned, adding the fact that this was at the same time necessary to tackle economic inequality.

 


“It truly is crucial to set in place the appropriate aspirations for South Africa as well as ensure that our economy ends up being globally competitive,” he explained to the two-day forum.

Investment was in fact of utmost importance for the purpose of economic growth and development, Gordhan suggested, adding the fact that the younger generation had a vital role to play.

“We have reached a phase in our development precisely where all of us need to make clear what we need to do,” he was quoted saying at the talks titled “Awakening Investment Potential.”

Gordhan explained that the modern world was in fact transforming and in addition beneficiaries should not necessarily simply be the elite. To be able to establish an environment for investment, a county’s savings at the same time performed a function, said the minister.

“The particular challenge is whether or not a country possesses a sufficient amount of savings … You will find significant imbalances of investment, savings and consumption. The real question is how you would rebalance. We now have a significant savings gap; we do not save adequate amounts in South Africa.”


Concerning the issue of “hot” capital inflows into South Africa, the minister explained these types of inflows had appreciated the local currency and in addition created a certain amount of instability.

There was clearly also a requirement to be able to develop an environment in which small business would most likely prosper.

Relating to the debate of nationalising the nation’s mines, Gordhan said: “It is simply not our policy as South Africa. We certainly have a vital contribution to make to develop the appropriate climate when it comes to economic growth. We will need to do what it requires to create the suitable confidence in our overall economy.”

Source: BuaNews, africa.ibtimes.com, bbc.co.uk

Share