Saving money is a key financial habit that leads to financial stability and security in the long run.
However, current trends show that Namibians are saving less, according to Sanlam Namibia Group Chief Executive Officer Tertius Stears.
Speaking at a media breakfast hosted by Sanlam Namibia, Stears said there are variances in the ability to save.
It was reported in April that at the end of December last year, nearly 1.3 million Namibians had N$25,000 or less in their bank accounts, blaming inflation, according to analysts.
According to reports, the N$25,000 does not include money saved in pension funds, deposits made in foreign currencies, or funds kept in unit trust accounts.
“One thing that we have seen in retail, people are saving less. We have definite differences in terms of the ability to save,” Stearssaid.
He believes the disparities in ability to save are due in part to the reason people saved and, more likely, because their disposable income is lower than it was before Covid-19.
“It is maybe not Covid but also interest rates, fuel prices, and lack of increases in income and all sorts of other things,” he said.
The CEOsaid individuals are saving a lot less than they used to in the general market, but that he hopes this would reverse and recover, but that this is a fact from a retail standpoint.
Meanwhile, Tega Shiimi Ya Shiimi, Chief Executive Officer of Sanlam Investment, stated that Namibia’s economy was already in recession prior to the Covid-19 outbreak and that the pandemic exposed the system.
“When Covid-19 came it just almost brought the camels back to certain areas. When it comes to recovery people are already struggling. As much as we are trying to stimulate the economy other realities such as high inflation and petrol prices have had an impact on our small open economy,” he explained.
When it comes to the ability to save, priorities have shifted to a different level, according to Shiimi Ya Shiimi.
During Covid-19, he explained that many people lost their employment and that not many have returned to employment, which has impacted their ability to save extra cash, noting that there is less to come out of the local economy.
According to the Ministry of Labour, Industrial Relations and Employment Creation in 2021, more than 14,500 workers were laid off between 1 January 2020 and 30 September 2021 as a result of Namibia’s faltering economy and the Covid-19 pandemic.
At the time, it was also said that 14,563 people had lost their jobs, with 11,654 losing their jobs owing to economic reasons and the closing or discontinuance of businesses and 2,909 losing their jobs due to Covid-19.
“Where we are right now, we are not out of the dark yet. We still see some additional pressure, we have seen certain recovery within the economy like tourism and the diamond sector but those are just small impacts and theeffect of that is unfortunately going to take some time,” he pointed out.
With the company being the second largest asset manager in the country in terms of total pool of assets, Shiimi Ya Shiimi predicted difficult times ahead.