Mzansi Afrika

From Johannesburg South Africa, a window on the world

Tuesday, July 20, 2004

Saving in SA

I discovered today, something that may only be news to me, but we have an organisation called the South African Savings Institute (SASI).  According to SASI we are not a saving nation. From 1997-2003, South Africa's savings rate deteriorated while the savings ratio of other developing countries improved. The South African Savings Institute, obviously as the name suggests, was established to address this issue, mainly to enhance, promote and bring awareness about the importance of saving. There are some interesting facts about saving:
Gross saving in South Africa averaged about 21 per cent of GDP in the period from 1960 to 2003.  From the beginning of the 1990s a downward trend in the national saving ratio caused the average saving ratio to fall to 16 per cent in the period 1990 – 2003.
From 1960 to mid – 1980s South Africa’s saving rate compared favourably with that of a number of developed industrial countries.  However, during the second half of the 1980s and particularly from 1997 to 2003, South Africa’s saving rate deteriorated while the saving ratio of other developing countries improved.
The deterioration in South Africa’s saving behaviour can mainly be attributed to declines in the saving of households and the general government relative to the GDP, which move than offset a fairly stable saving performance by the corporate sector.  The longer-term downward trend in saving by the household sector since the middle of the 1980s became more pronounced in the second half of the 1990s and the beginning of the new decade.  As a ratio of disposable income, net saving by the household sector declined from 5.5 per cent in 1992 to an average of about 0.5 per cent between 2000 and 2003.


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