Addressing delegates at the launch of the South African Savings Institute's 'Put on your Savings Shoes' campaign, Moleketi said that, while there were arguments as to whether savings spurred growth, or growth spurred savings, savings are “are an integral part of promoting growth and development, and that without savings, wealth and capital investment are likely to be compromised”.
“It is with these considerations in mind, that we must view South Africa's declining gross savings ratio with some concern.
“Though government has done well to reduce its dissaving, and corporate savings remain reasonable, household saving has shown significant decline over the past two decades.”
He said that, in aggregate terms, South Africa's savings ratio peaked at 26,7% of gross domestic product in the early 1980s.
The latest estimates of gross savings put the figure at 13% of South Africa's economic output, which lags other emerging markets such as China where the savings rate is over 40% of GDP.
“Of particular concern is the low household saving rate which is at a record low of about 0,2% of disposable income.”
Moleketi added that, “complexities underlie these simple statistics, but they do cast a powerful picture”.
The level of household debt as a percentage of household disposable income now stands at 68% and the access and use of credit continues to grow, despite warnings by the Reserve Bank Governor that households should use the opportunity of a low interest-rate environment to pay off debt.
“It may be a natural consequence that household saving in South Africa would fall since democracy, given that a large proportion of the population was previously excluded in terms of access to credit, housing finance, job opportunities have increasingly gained access to these.
“However, this is not the entire picture, as the vast majority of the South African population still struggles against absolute poverty.
“This implies that disposable incomes and, therefore, those individuals' ability to save are low.
“Yet even amongst low-income households, mashonisas and micro-lenders thrive. Surely, if one has the ability to repay a micro loan, then one also has the ability to save when not paying such a loan?”
However, he was encouraged by the fact that some banks have launched savings schemes and products that take on board the collective savings of burial societies and stokvels.
The uptake in Mzansi accounts, which now stands at about 3,3-million, indicates that even though peoples' incomes may be low, they are still willing to save.
“Of course, the increase in Mzansi usage also shows that consumer confidence in the banking sector is increasing, especially for those previously unbanked.”
In addition, Moleketi is of the view that the Competition Commission investigation into the structure of banks will result in lower fees.
He added that government policy, such as introducing the RSA bond and lowering tax on retirement funds by 50% would aid saving, but that, at the end of the day, the onus was on individual South Africans to save.
“The month of July should not merely be the month of saving, but the start of a habit of savings for those who are not currently doing so.
“It should begin with ourselves, our family and our friends. Let savings be the diamonds on the soles of our shoes. One way to lose our savings blues … and certainly we have nothing to lose.”