“We are building our castles on sand; he who has ears let him hear”

For my brethren, who aren’t of a Judaeo-Christian persuasion, the teachings of Jesus of Nazareth, even if you don’t believe in the larger context of his teachings, you’ve got to admit that he was quite a wise man. One of my favourite parables is the one where he teaches that only a foolish man builds his house on sand…because when the storm came, the foundation collapsed and the house fell”. “The wise man, however, who built his house on the rock wasn’t left homeless because the foundations withstood the storms battering”….or something like that. I know that I haven’t written the parable, word for word, but I guess you get the drift. This parable, that I believe is ‘built’ on common sense, is one that many in the world have forgotten. Just look at the global financial crisis. Without getting into the nitty-gritty of the economics of it all, here is my layman’s take on it all. The big financial institutions, in an orgy of shameless greed, forgot the fundamentals of banking. They built their economic mansions on sand. A fundamental of bank lending is that ‘you never give someone a loan unless they have proper collateral. However, the sub-prime loans debacle showed that many US bankers had forgotten this tenant of banking. So, to make a quick killing, they started giving out home loans, called sub-primes, to anyone who wanted them. It didn’t matter whether those the loans were given to had a job, whether they had a good credit history or anything that made them worthy of a loan. Why? Because they thought they would make a killing by gradually increasing their interest rates. But like the foolish man, who built his house on the sand, the storm came and wiped them out. So, Bear Stearns, Merrill lynch, Bank of America and many others have gone bankrupt, been swallowed by other banks, repossessed by the US government or have been forced to radically change their entire management philosophy. I wouldn’t have wasted one minute of my existence even thinking about all the homes being repossessed in places like Detroit, Michigan and Little Rock, Arkansas if everyone’s greed didn’t impact me, and the rest of the world, so brutally. So, instead of it all being something I read in the news, like swine and bird flu, my country is feeling the brunt of it. Our growth rate, which was projected to be above 8 percent this year, will have to be revised backwards and, according to Donald Kaberuka, President of the African Development Bank and former Rwandan Finance Minister, the entire East African region still hasn’t felt the full brunt of the financial tsunami. Worse will come; as surely as night follows day. And why? Because some people decided that they wanted to make a quick buck. But I won’t attempt to make it seem as if only the ‘evil’ bankers have been living a lie. Thank God for some small mercies. I’m thankful that credit cards haven’t yet been introduced into our country. If you don’t know how credit cards work; here’s a small scenario. If you have a credit card, you can go to a shop, charge the bill to your credit card, and then, later on, the bill is sent to you by your credit card provider. Sounds great right? Well, the buried secret is that the credit card company makes sure that the interest rate gives them quite a profit margin. I’m not personally worried about credit cards, as a financial tool, because they can bail someone out when they don’t have cash on them. However, I’m worried about something else. I know that what I’m about to say will cause a bit of a hullabaloo and I want to state that I’m not trying to insult anyone personally. There is a certain attitude that I think is potentially unhealthy in many Rwandans I have met. I find that many are a bit too pretentious, especially when it comes to showing off their wealth, or illusion of it anyway. I’ve seen fellows in a swanky bar, with the requisite atrocious prices, refuse to buy the cheaper beer, and instead, buy two shots of Johnnie Walker (Black Label, of course), and sip tiny amounts of it the whole night. And not because he/she (this trend is unisexual in nature) is going easy or anything like that. It’s simply because they prefer to walk around with a glass of whiskey, which gives off the impression of wealth. This, when, truth be told, the person probably has, barely, taxi fare back home. While this example might seem a bit amusing, the attitude this involves is dangerous. This is because, this mirage, that many people have fallen in love with, has permeated into the very fabric of the young, emerging middleclass, and dare I say it, the older one as well. Why else will someone, who earns less than Rwf500,000, decide to get a bank loan of Rwf5m, at an interest rate of between 18 and 20 percent, just to get a reconditioned Mercedes Benz or Rav4? Or ask for hundreds of millions just to build a house that is so palatial it looks like something right out of Beverly Hills, with ‘gazillion’ (very, very many) bedrooms, whereas the fellow has a family of four? It doesn’t make sense. I mean, I haven’t a problem with anyone living in luxury, I want to be able to do that eventually myself, but I won’t mortgage myself to the gills just to pretend that I am a tycoon. I’ve heard horror stories about people who barely enjoy a cent of their entire salaries because their bank has removed their cut. I think that a humbler method of wealth creation, that is based on fundamentals, is needed as we embark on this national adventure that will, if we do it right, see us reach the potential that the Vision 2020 portrays. Let’s have less of a spending culture and more of a culture of saving. Let’s have one of thrift and less of dowdy posturing. And if you want to build your mansion in Nyarutarama, save, save, save some more and then build that house. And gleefully collect your ENTIRE paycheck every month. sunnyntayombya@newtimes.co.rw