Reserve Bank of Malawi (RBM) Governor Wilson Banda has said Malawi is doing very poorly in gross domestic savings as a percentage of the gross domestic product (GDP), falling far below the sub-Sahara Africa average.
Banda was speaking in Lilongwe on Monday at the launch of the 2023 Savings Awareness Week.
According to Banda, in 2022, Malawi’s gross domestic savings, as a percentage of GDP, was estimated at 9.9 percent which does not compare favourably with the sub- Saharan region, which recorded 20.1 percent during the same period.
“Changing the narrative requires a holistic approach to ensure increased earnings. But of what good are high earnings if they are all spent?
“This takes us to the crucial point of exercising financial discipline among the Malawian population, to live within our means in order to attain high levels of savings and investments. In this sense, saving should be embraced as a lifestyle,” Banda said.
- Advertisement -
The RBM chief said to accumulate significant saving one should deliberately develop short, medium and long-term financial goals and budget towards achieving them.
Banda observed that, more importantly, the budget drawn should be adhered to.
“More importantly, saving allows one to accumulate resources that can be invested in small-scale businesses or financial instruments such as shares, Treasury bills, collective investment schemes, bonds, as well as to educate family members,” Banda said.
The central bank governor reiterated that no individual or household can financially prosper without savings.
- Advertisement -
- Advertisement -
He said it is encouraging to see huge amounts of money being saved through the Savings and Loan Groups (SLGs), commonly known as village banks, in Malawi.
“The huge amounts being saved through SLGs signify nothing but the fact that everyone can save,” he said.
Bankers Association of Malawi (Bam) Executive Director Lyness Nkungula said the habit of saving creates a sense of emotional and mental security that is essential in today’s world.
“If you save money today, the money will save you in the future because money is an essential commodity that helps run our lives.
“The savings week presents an opportunity for consumers to learn about financial products as well as how to select and assess appropriate financial products to maximise their usage for key life events,” Nkungula said.
The goal of Savings Awareness Week is to raise public awareness and understanding of the savings and investment opportunities available in the financial sector, as well as to disseminate information that will help potential savers and investors make informed decisions.
The week will be commemorated under the theme ‘Save Today, Live Better Tomorrow’.
During the launch, RBM presented awards to firms that have played a significant role in promoting the culture of saving in the country.
