Finance and Namibians

Originally published in the Informanté newspaper on Thursday, 6 September, 2018.

It is a fact of life that there exists but limited resources, yet we as a people have unlimited wants. As a result, we had to develop an equitable system of resolving this in our lives, and over the centuries, this has developed into a system of finance that has permeated our lives. However, not all of us are equally adept at navigating the flow of funds that surround our lives. As Namibians, we need to know what we’re missing, and as usual, Statistician-General Alex Shimuafeni and his team at the Namibia Statistics Agency have our backs.

Recently, they released a report called the 2017 Namibia Financial Inclusion Survey, to determine how we as Namibians interact with the financial system, and how we interact with it. As only those 16 years or older can legally enter into financial transactions, they were the focus of the survey. Due to its nature, we could also see some key demographic statistics concerning the Namibian populace. 

Per the survey, the eligible population of Namibia for financial services was estimated at 1.45 million people, living in approximately 570 000 households. 52.5% were female, with 47.5% male, while 52.9% reside in urban areas, and 47.1% in rural areas. 61.3% of Namibians have never married, while only 31.7% are. Only 8.3% have a tertiary education, with 54.8% having completed high school, and a further 23.9% primary school. 10.1% of the population has never attended school. 

Let’s have a look then at the hardships faced by Namibians. Only 37.3% could say they’ve never had to go without a cash income, with only 45% able to claim that they have never had to skip a meal due to financial troubles. 62.6% could at least say that they’ve never not been able to send their kids to school due to monetary problems, and 55.1% could claim money had never prevented them from getting medical treatment.

In terms of homes, 68.8% of Namibians could claim to own a home, with 17.1% renting and a further 13.2% living rent-free. Of those, 66.4% built the home, while 20.4% bought it and 10.5% inherited it. Of those who built or bought their home, 40.6% used saving to fund it, with 22.9% simply using materials from nature, with only 8.6% using a bank loan.

Of these homes, 60.4% have piped water available, while 23.1% uses a public tap or standpipe. In terms of sanitation, 43.8% have no facilities and have to use the veld, while 41.4% have a sewer system or pit latrine. 49.6% still use firewood to cook, with 35.3% using electricity and 12.6% using gas. Communication-wise, 94% of households have access to at least a cellphone, with 29.2% having internet access.

So how do we receive our incomes? Turns out 17.3% of us receive salaries from private companies, with 10.3% from government or a parastatal, and 9.9% receive income from pensions. Surprisingly, 62.5% of Namibians receive their income as cash, with only 37.1% receiving into a bank account, and 1.4% into bank wallets. 67.3% report that they receive this income on a monthly basis. In terms of the amounts, we can see that 32.5% of Namibians receive between N$ 1 and N$ 1000 per month, with a further 29.1% receiving up to N$ 2000. Only 9.7% reported receiving more than N$ 11 000 per month. 

When we look at our financial capability, however, we see other issues emerging as well. 46.7% reported that it is very difficult to keep up with financial commitments, with another 21.8% reporting it to be somewhat difficult. Only 6.9% reported it to be very easy. Furthermore, only 23.1% could report that their income lasted until the next paycheck, with 40.2% reporting that it never did. To cover the difference, 61.5% would get money from family and friends, while only 10.5% could dip into savings. 

In terms of spending, the three things we buy first when paid appears to be groceries (76.8%), paying our water bills (36.5%) and putting some money aside for household items (30.6%). 31.5% of people make their financial decision alone in their household, with a further 50.9% sharing that responsibility with other members. About 15.7% reported that they are not involved with any of the financial decision making in their households.

Perhaps most disconcerting, however, is that fact that the data reveals that Namibians suffer from the superiority illusion, or above-average effect. When asked, 71.2% of Namibians indicated that they consider themselves organized when it comes to managing their money, with 58.9% considering themselves savers rather than spenders. 

The survey, however, tells us a rather different story. Only 28% of Namibians record money received monthly, and 26.3% recorded expenses monthly – and 58.3% and 59.8% respectively do not keep record at all. And while 73.7% indicate that they plan on how to spend their salaries, 77.6% have to change their plans if something unexpected occurs, with only 12.2% having made provision for unexpected events. 

If we consider ourselves organized when it comes to our financial matters, but cannot even create a budget or plan for unexpected events, we certainly cannot claim that as fact. The full report has many more interesting statistics, but this one, I feel, cuts to the heart of the matter. As long as we believe ourselves to be financially competent, we do not try to improve our capabilities, and we remain unable to manage our income properly. The time has come to swallow our pride, and start asking for help from those more financially literate if we are truly to become as financially organized as we believe ourselves to be.  

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