For many Nigerians, October 30th is not tied to any major date in the country’s calendar. However, the World Savings Day is commemorated on this date. It is not hard to fathom that an important day such as this is rarely known, let alone commemorated in Nigeria per say.
Nigeria and Nigerians are perhaps one of the countries in the world with the lowest saving culture. With over 90 million adult population, Nigeria has an average of 40 million bank accounts with attendant bottlenecks inhibiting savings.
The importance of a substantial savings rate cannot be over-emphasised. Apart from curbing inflation because it reduces excess liquidity in circulation, it is a consensus that economies where savings rates are high; their per capita income are higher, standards of living are higher and life expectancy are found out to be high as well.
For many reasons, Nigerians do not save up to what is expected. Cost of living are higher than it was in the last 20 years. While billions of dollars (USD) has entered Nigeria in the last 10 years during the boom in oil prices, majority of the income has gone into funding consumption rather than investment and savings.
In 2013, Rennaissance Capital did a report that Nigeria is gradually increasing its middle income population who are attractive to investors to bet on. However, few years down the line, Nigeria has fallen into a recession and it seems the country never really has a middle class in the first place. With an average of USD4.6 trillion in savings, China has been able to stabilise its domestic affairs as its economy shifts from export dependent to local-consumption driven. Without a robust savings pedestal, the world could have witnessed another financial crisis should China defaults on its rising debt
The real solution to building Nigeria’s financial fortune must holistically promote a sustainable culture of savings. It is this savings that can fuel Nigeria’s passionate and entrepreneurial spirits. Nigerians will have to be the one investing in Nigeria more than foreign investors. When people have substantial of funds in savings, they can easily plan, invest and lead a better life.
On the 31st of October, the World Savings Day will be commemorated. The event is promoted to “increase the public’s awareness of the importance of savings both for modern economies and for individuals”. With so much effort geared towards financial inclusion in rural and low income parts of Nigeria, the real constituency that should be enlightened is the ‘working class and blue-collar’ population. They are the ones with a considerably higher disposable income.
Savings promotions campaign must go beyond moralising and scare mongering. Financial authorities can work with deposit and deposit money banks to create incentives for people who save a certain percentage. Instead of targeting people who do not really believe in saving, why not reward those who save. This reverse psychology might go along way in encouraging people to spend less on consumptive tendencies.