Is Poor Savings Culture Jeopardizing the Future of Nigerians? – Adesola Adeyinka, CFA,
Co-founder/CEO, Vale, Speaks
With only 45% of Nigerians reportedly owning bank accounts, how does this affect our ability to save for the future? Furthermore, in 2019, the NDIC reported that less than 2% of bank account holders had up to N500,000 in their accounts.
It, therefore, appears that most Nigerians have no savings and continue to live from hand to mouth, a condition Mr Adesola Adeyinka, CFA, CO-Founder/Chief Executive Officer, Vale, wishes to address the current financial ecosystem conditions.
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In a recent financial outreach programme, Sola immediately pointed out that when asked which is more crucial, savings or investment, it would be like asking which is more important, opening the door or walking into the room –one must come before the other. In this case, while investing is needed, you must begin with a healthy saving habit if you will successfully manage your money.
He stated, “Many people believe that saving is no longer relevant, and some have lost all they have through investment with nothing to fall back on. There must be a perfect understanding of savings and investment and their roles in the journey to financial freedom.”
That said, he went on to highlight lessons he has learnt during his journey to becoming a notable expert in managing money. “First, we must understand that saving hinges on delayed gratification. As such, because of the immediate pain, we experience while saving, we must focus on the benefits to ensure we keep at it.
An immediate benefit that comes to mind is meeting expected and unexpected capital-intensive needs. Maybe you’re planning a wedding, want to go on vacation, need to pay your rent, or must sort hospital bills; what you have saved in the past is what will ease the burden of such expenses without creating new money problems in the future.”
Next, he commented that saving allows you to take advantage of mouth-watering opportunities you may not have anticipated. For instance, in this japa season, many have made distressed sales of assets such as generator sets, inverters, furniture, and even cars.
In a world where cash is king, only those with value readily available can take advantage of such, paying far less
than what would ordinarily obtain if they tried to purchase these items through conventional means. Savings can be your gateway into a world of opportunities.
A common myth Mr Adeyinka tackled is the saying, “You can’t save your way to financial freedom.” In his address, he emphasized that having savings to cover three to six months of living expenses has provided many people with the stability to weather a sudden job loss or reduction in income.
Where you have savings, you are safe – pun intended – from the anxiety and hopelessness that comes from being unable to meet your basic needs in the short term while you search for new opportunities. That sounds a lot like financial freedom. As earlier stated, savings open the door for investment.
Mr Adeyinka explained, “The fact that you can invest some of your savings and earn passive income is one of the best reasons to save. For me, making money that does not require you to exert energy through things like dividends, interest, coupons, or even rent is one of the best feelings in the world.
More so, some things in life are sweeter when you buy them with passive income, especially luxury items like Jimmy Choo shoes, a Rolex, or maybe even a vacation.
In his final point, Mr Adeyinka stated, “Savings can provide you with capital or resources to pursue your dreams. Several people have entrepreneurial dreams and hope that they will pursue them one day. Most dreams require money, and your savings can come in handy here.
Even if you need to raise additional capital elsewhere, having a fraction of the sum required will allow you to be taken more seriously by potential investors.” Given the benefits highlighted above, poor savings culture portends a bleak future for Nigerians where they are ill-equipped to meet the needs that will improve their overall standard of living and ability to leverage opportunities for advancement.
As such, platforms that provide immediate benefits to saving are critical for Nigerians at all socio-economic levels. For instance, Vale one of Nigeria’s fastest-growing digital banks licensed by the Central Bank of Nigeria – helps Nigerians save and get great returns. Vale guarantees subscribers a Credit alert with money they have not earned through any effort, earning them the title of the bank that truly pays.
With its array of different savings products, every type of customer can find the product that suits their needs, whether you are securing the future, funding that dream, or attaining financial freedom. For more information, visit www.vale.ng or download the app via Apple or Google Play store.
Where’s the income to save ? Has the government provided conducive environment for Nigerians to save ? What’s interest rate on savings? Anyway, corrupt public officials, politicians & business people are saving.
The interpretation presented here is quite paternalistic and not supported by the data. In fact, Nigeria’s gross savings rate for 2021 stands at 33.87%, which is much higher than the global average of 23.47%. Therefore, it is inaccurate to say that Nigeria has a poor savings culture. The problem lies in the fact that the country’s economy does not provide an enabling environment for converting these high savings into productive domestic investments.
Over the past four years, poor government policies have hindered the growth of businesses and led to a significant increase in inflation. As a result, people with savings have resorted to various strategies such as converting their savings into more stable currencies like the US dollar, investing internationally, or converting their savings into often idle real estate. It is important to note that Mr. Adeyinka’s company, Vale, offers products that indirectly facilitate capital flight from Nigeria to international locations through dollarized financial products. He should be well aware of this, given his position.
What is poor savings culture when inflation is running riot. When the entire incomes is consumed and nothing left to save.
What is saving culture when banks are cheating savers on their interest rate. Savers are complaining. The minimum interest rate on savings must not be lower than 30 percent of MPR. I’m essence as MPR is 28 percent, then banks must pay a minimum of 5.4percent per annum or 0.45 percent per month on savings account if you the savers does not withdraw more than three times in a month. You find a situation where the banks interest incomes are riding while they are able to deny savers on the expense side
What is saving culture when there is forced savings already. The CBN cashless policy is analogous to forced savings. I have funds in the bank and there is a limit to what I can access from.the counter. Is that not forced savings
The youths or middle income group that are supposed to be investing to propel the economy are busy investing in ponzi abd crypto. Gone are the days when the stock market was used to create the middle income group in the country. Now one is either poor or rich