EFFORTS to encourage individuals to save money for retirement and other pressing matters by various financial institutions such as banks and insurance indicate the basic level of investing Basotho are at.
May 30, 2022
3 min read
Saving and investing money are relative
The war between Russian and Ukraine makes life difficult for everyone
- Basotho lack disposable income
- Everywhere, money lenders are mushrooming
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A struggling economy, we can only imagine how few is the number of those with a disposable income amidst the Russia/Ukraine conflict, a high unemployment rate, inflation and the Covid-19 pandemic.
Everywhere, money lenders are mushrooming. It is a quick money-making scheme but it is doubtful how sustainable the business is given the lack of information on the model that, to some extent, has filled the space where traditional money lending institutions like commercial banks has ignored.
Individuals are borrowing from the loan sharks to make up for their shortfall. But how do you even come to think of saving any money when all of your income is exhausted in one or two days after payday? This is not just a problem for the consumer, it is a problem for government and policymakers to resolve economic constraints that further push citizens into the debt trap.
How could you possibly be able to save money living in a country that is equally highly indebted, unless you are a self-enriching thief who lives on the largesse of government coffers? While we do not condone the lack of a saving culture, it requires enquiry why certain people have amassed so much wealth in a country whose majority live below the poverty line.
It is a winner takes all nation but the imbalance and inequality in income distribution has ultimately led to increasing crime, prostitution, human trafficking, child labour, all of which are a burden on limited government’s resources. This is evident with poor service delivery as our roads are beyond repair. The justice system is overwhelmed with backlogs, missing dockets, bribery and poorly investigated cases that are thrown out of court to the detriment of victims.
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We still have a long way to go as a nation until we can be able to save for emergencies, let alone for sound investment plans that are geared towards retirement and tertiary education for our children. Already, we are struggling with food production and the changing financial market can only point to an environment far from extra income that could be spared for the future.
A few Basotho are fortunate to have decent jobs that have allowed them to have all sorts of investments, endowments here and annuities there. Their employers can afford to pay for their medical aid while they also earn a bonus from historical earnings of their multinational firms that are usually monopolistic. While there is talk of saving and investing for the future, a lot of these companies are comfortable giving peanuts to the majority of employees while the executive take home millions of maloti in bonuses and options.
It is logical to talk about saving and financial plans but we should also pay close attention to how much money people make and the size of the country’s economy. We should be truthful about how much we pay our employees when return on investment is everything even if it means paying your workers less than living wages.
Saving and investing are relative.