RBM urges saving culture despite high inflation
Reserve Bank of Malawi (RBM) Governor Charles Chuka has urged Malawians to tighten their belts, live within their means and keep saving despite high inflation rates and instability of the kwacha.
Chuka spoke of the sharp drop in the value of the local currency in Mzuzu on Monday when he opened the 2015 National Financial Literacy Week which seeks to close the gap that excludes nearly half of the adult population from financial services, including banking and insurance.
However, the prologue of Chuka’s prepared speech did little to inspire hope among those with little or no confidence in the formal financial institutions due to dipping kwacha value.
He said: “Money will always lose value because of inflation. As a country, we expect to keep inflation rates between three to seven percent per year. However, it was approximately 25 percent in September and we project it to be around 27 percent in February next year.”
The governor, addressing hundreds who gathered at the Mzuzu Shoprite carpark for the opening ceremony, stressed that even government should guard against overspending to avoid serious consequences.
“You need to know how to use money, how to increase its value and how to invest,” said Chuka, echoing the theme of the event Budgeting and Savings: A Foundation to Financial Freedom.
At stake is the value of bank savings and the RBM boss reckoned there is need for financial institutions worthiness of clients’ money in their custody.
In 2007, a Finscope study showed that 55 in every 100 Malawians had no access to basic financial services, including savings and lending facilities.
RBM figures show the tide has been turned as by last year 55 percent of the adult populationwas reached.
Government is finalising the National Financial Literacy Strategy which is expected to e launched early next year, according to Deputy Minister of Education, Science and Technology Vincent Ghambi.
The Mzuzu event is the third in a series of National Financial Literacy Weeks after the first held in December 2013 in Blantyre and the second held last year in Lilongwe. n
