Promoting A Savings Culture In Nigeria

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Do not save what is left after spending, but spend what is left after savings

Warren Buffet

Great minds have long debated about the importance of saving for individuals and for nation states. Warren Buffet is one of the great minds and in the above quote heprioritized the importance of savings over meeting daily wants and expenses. It is in lightof this continuous debate and the prominence of savings in the Global Economy that the Consumer Awareness and Financial Enlightenment Initiative (CAFEi) joins the world to celebrate the World Savings Day on October 31, 2017. The Consumer Awareness and Financial Enlightenment Initiative (“CAFEi”) is a nongovernmental organization focused on consumer awareness and financial enlightenment. CAFEi’s focus on consumer awareness is to improve the comprehensive understanding by the consumer of their rights while its focus on financial enlightenment is the process of improving consumers understanding of financial products and concepts.

It is pertinent to state that the World savings day was set aside in 1924 to encourage people to save their money in banks rather than keep them in their houses. However, the essence of this article is to elucidate the essence of savings and identify saving strategies.


Savings have been variously explained by different authors as the sum left over when the cost of a person’s consumer expenditure is subtracted from the amount of disposable income (income after tax) he earns in a given period of time. The problem with this definition is that unlike Warren Buffets view point, it gives prominence to expenditurefirst over savings. It is important to note that Warren Buffets approach is similar to that ofJoseph in the Bible.

During the days of Pharaoh, Joseph set aside the Egyptians’ savings during the years of plenty before sharing and selling the rest of the harvest to the people. It was on this basis that Joseph became a wealthy man in Egypt because he had saved enough during the season of plenty to be influential during the dry season. Indeed, apart from the economic benefits that accrue from savings, there is also evidence from a study by the Northwestern Mutual Insurance company that savings is linked to increased happiness. The running themes in all definition of savings are two key concepts; savings before expenditure and proper security of savings. Like Joseph and Warren Buffet it is important to save before spending but more importantly it is pertinent to keep your savings in a well secured place to safeguard it from theft and misappropriation. The question then arises.



Modern day society is more complex than ever before, we have technology advancement beyond the fathomable. This makes it riskier to keep money or any form of valuable products at home. The modern day bank however solves this problem. It is a licensed institution that can securely keep valuables from armed robbery and deterioration because of the superior storage methods and facilities and the foolproof security presence at its disposal.

Moreover, despite the sensitization on the need to save, savings mobilization in Nigeria is still very low. According to the Nigeria Deposit Insurance Corporation (NDIC), in 2015 2% of Nigerians had 90% of banks’ total deposits. Enhancing Financial Innovation and Access (EFInA) has also noted that in 2016, only 36.9 million adult population (38.3% of the adult population) had access to a bank account. Nationally, there is a very strong relationship between savings and economic growth. In recognition of this, several economies and governments offer a number of saving and investment schemes that are tax exempt in order to promote the practice of saving in the country. By investing in such saving schemes, the individuals can save a considerable amount of tax and the governments in return invests the earned capital in various development projects in the country that help to build a better economy.

Factors inhibiting a habit of active savings in the country can be economic, social and/or psychological. Several works have identified the following specific hindrances to an effective savings culture in the country: high cost of living, lack of confidence in government and key stakeholders in the country’s financial system, impulsive purchase,influence of advertisements, cultural beliefs and poor infrastructural facilities that promoted a savings habit.


By Otunba (Mrs) ‘Debola Osibogun

President Consumer Awareness and Financial Enlightenment Initiative (CAFEi)

Former President of the Chartered Institute of Bankers of Nigeria

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