Staff Reporter
Windhoek, November 1 – In a period marked by economic uncertainty, Old Mutual Namibia reaffirms its commitment to understanding the financial behaviours and attitudes of Namibians. Yesterday, the company launched its annual Old Mutual Financial Services Monitor (OMFSM), a comprehensive study focusing on employed Namibians aged 18 to 65, who account for 28% of the population, earn N$3,000 or more, and reside in urban and peri-urban areas.
Diminished Confidence in the Economy
According to the OMFSM, only 24% of working Namibians express confidence in the country’s economic prospects, indicating a prevailing sense of concern amid the sluggish economy.
Resilient Personal Financial Outlook
Despite macroeconomic challenges, the report reveals optimism among Namibians about their financial outlook. Approximately 58% believe their financial situation will improve, demonstrating resilience amid economic difficulties.
Personal Earnings Stagnation
The reality for many working Namibians is sobering, with 75% reporting stagnant or reduced incomes compared to three years ago, before the pandemic.
Financial Stress Prevails
The survey underscores that 42% of Namibian consumers continue to grapple with significant financial stress, particularly lower-income earners who provide support to extended family members affected by the pandemic. Six in ten Namibians find themselves in the “sandwich generation,” financially supporting both children and adult dependents.
Top Financial Priorities
Income security is the foremost priority for Namibian consumers, followed by cost-cutting measures and debt repayment. Emergency savings have gained importance in 2023, underscoring the growing awareness of financial preparedness.
Household Spending Patterns
Consumption/living expenses account for nearly half (48%) of Namibian household spending, with debt servicing (19%) claiming a substantial portion, equivalent to savings. Notably, 27% indicate struggling to manage their debt.
Significant Personal Loans
About 40% of working Namibians hold personal loans, primarily used for unexpected expenses, debt repayment, day-to-day costs, or specific purchases, including education, household maintenance, funerals, and medical expenses.
Diverse Sources of Income
The report reveals that almost half (49%) of Namibian consumers rely on a single income source, while 29% engage in additional side jobs or contracting work, and nearly a quarter use their savings as an income source.
Room for Retirement Savings Improvement
The study suggests there is room for enhancing retirement savings, as less than half of all workers actively save for retirement. Low confidence exists in the adequacy of these savings, with many expecting support from their children or the government during retirement.
Financial Goals and Priorities
Namibians prioritize emergency savings, children’s education, homeownership, and securing their family’s future as their primary financial goals. Retirement saving, although important, is not the top savings objective, particularly among younger and less affluent individuals.
Empowering Change
Old Mutual Namibia is actively addressing these challenges through initiatives like the Old Mutual Sustainable Economic & Empowerment Drive (OM SEED 2.0) and internship programs aimed at empowering entrepreneurs and providing meaningful employment for graduates. The Old Mutual Financial Services Monitor sheds light on the financial difficulties faced by working Namibians, underscoring the importance of these initiatives in improving financial well-being within the nation.
Mignon du Preez, Old Mutual Namibia Group Marketing, Public Affairs, and Sustainability Executive, expressed, “In these challenging times, Old Mutual Namibia is dedicated to not only understanding the financial landscape but also actively addressing it. The Old Mutual Financial Services Monitor serves as a vital platform for fostering essential conversations and ensuring our community’s voices are heard.”
Du Preez continued, “Our internship program plays a significant role in providing meaningful employment for first-time graduates as they embark on their journey into the job market. The Old Mutual Financial Services Monitor highlights the importance of these initiatives in improving financial well-being within our nation.”
