As Rwanda joins the world to mark World Savings day on Tuesday, October 31, the Ministry of Finance and Economic Planning (MINECOFIN), says the government’s target is to save 23 per cent of its total economic output (Gross Domestic Product or GDP) in the year 2023-2024. The national savings rate (indicated above as 23 per cent) is like a meter for a country's financial well-being. It tells how much money people, businesses, and the government save instead of spending. If the savings rate is high, it means the country is in good financial shape because it can use those savings to invest and grow the economy. ALSO READ: New initiative to promote savings culture In 2022, the amount of money saved by Rwandans compared to their total income (the national saving rate), was 14.4 per cent of the country's GDP. However, the goal was to save 18 per cent. According to MINECOFIN, the likely reasons for not reaching the goal are that many people in Rwanda don't have a saving culture as well as the relatively low incomes and high standard of living. Additionally, the rising prices of goods and services, called inflation, put pressure on people's ability to save more. ALSO READ: Embrace a savings culture at a young age Regarding the key policy actions, MINECOFIN says there is a need to enhance the capacity of investment clinics to support small and medium entreprises (SMEs) to access alternative source of financing other than traditional ways of financing. Additionally, the Ministry says there has been awareness campaigns conducted by the Central Bank, Rwanda Social Security Board as well as insurance companies and NGOs to boost the culture of saving among Rwandans. ALSO READ: Covid-19 sparked a culture of saving among Rwandans, report shows There was also an issuance of treasury bills and bonds through Rwanda Stock Exchange (RSE) as well as the fast-tracking automation of Umurenge SACCO to allow rural populations easily access financial services, according to MINECOFIN. With an aim of educating people on the significance of prudent financial planning, Rwanda joins the rest of the world on October 31 to mark World Savings Day. Observed annually, the day also emphasises the importance of saving for the future. It is important to note that saving money is a crucial means to prepare for financial emergencies and secure a stable income during retirement.
