Financial services company, African Alliance (AA) says it is on a drive towards cultivating a culture of greater savings. This came to the fore during last week’s launch of a managed fund for the Botswana Association of Tribal Land Authorities (BATLA), known as BATLA Group Investment Scheme.
African Alliance head of sales and distribution, Moarabi Mariri said Botswana has a low savings culture as compared to taking out of personal loans.
Statistics show that although earnings in Botswana are better than other Sub-Saharan countries, the level of personal savings is still considerably low.
The country’s gross domestic savings was last measured at 37.6 percent of gross domestic product (GDP) in 2014, according to the International Monetary Fund (IMF).
Against this backdrop, Mariri urged Batswana to start fostering the culture of saving. Like many other nations, he said, Batswana only utilised pension funds as a saving option since it is compulsory by law.
“It is imperative for the Botswana nation to improve financial literacy and ensure that people achieve financial independence before retirement,” he said. Mariri also noted that the world over there was a problem of job creation, which meant parents continued to be breadwinners even at retirement. He said the recent advancement in medicine created the longevity issue with most pensioners outliving the economic value of their pension annuities, adding that most have to ensure that they have discretionary investments to augment their pension incomes.
Presenting the objectives of the BATLA scheme treasurer, Thuso Bogatsu, said the initiative is meant to foster an investment culture amongst BATLA and staff, as
The other aim, he said, is to provide financial literacy for members and to create fundraising for BATLA through management fees and increased membership. The scheme is also meant as a marketing tool to attract and retain members and also give opportunities for other investment with African Alliance in the future. According to Bogatsu, membership of the BATLA investment scheme is optional. For P100 per month, members can choose to be part of the investment scheme.
Member fees will be invested into the African Alliance Botswana Value Fund, which invests in shares, bonds and floating rate notes listed on the Botswana Stock Exchange (BSE), as well as government bonds and short term-money instruments.
As part of the agreement, African Alliance will visit all potential Land Boards and Ministry of Land and Housing offices across the country to present to all members and those seeking to take up membership.
Botswana Housing Corporation (BHC) chief executive officer, Reginald Motswaiso, said research has shown the world over that a majority of people lack the culture of deferring current consumption for future consumption.
“Most of us live for the moment and hence most would retire heavily indebted. Botswana is not spared from this culture of excessive consumption,” said Motswaiso.