SOUTH AFRICANS ARE LOSING FINANCIAL LITERACY BY MAMAPUDI NKGADIMA , MD OF AFRICAN RESPONSE
SOUTH AFRICANS ARE LOSING FINANCIAL LITERACY BY MAMAPUDI NKGADIMA , MD OF AFRICAN RESPONSE
IN THE WAKE OF COVID-19 AND THE ACCELERATED DIGITISATION OF FINANCIAL SERVICES , THE GAP BETWEEN SOUTH AFRICANS WHO HAVE HIGHLY DEVELOPED FINANCIAL LITERACY AND THOSE WITH LITTLE OR NONE HAS NOT JUST WIDENED – IT HAS TAKEN ON NEW DIMENSIONS .
THE CONSEQUENCES FOR SOUTH AFRICAN SOCIETY ARE DIRE . THEY ARE TO BE FOUND IN OUR NATION ’ S HIGH DEBT LEVELS , THE EASE WITH WHICH TOO MANY OF US FALL VICTIM TO SCAMSTERS , BUSINESS IDEAS LOST DUE TO LACK OF KNOWLEDGE ABOUT OR LIMITED ACCESS TO FUNDING . THIS COULD LEAD TO MENTAL HEALTH ISSUES SUCH AS ANXIETY AND DEPRESSION . ALL OF THESE AFFECT THE MOST FINANCIALLY VULNERABLE SEGMENTS OF OUR SOCIETY THE WORST .
FURTHERMORE , RESEARCH BY DEVELOPMENT ECONOMISTS ELIZABETH NANZIRI AND MURRAY LEIBBRANDT ( 2018 ) DEMONSTRATES A DECLINE IN FINANCIAL LITERACY ACROSS ALL LEVELS OF EDUCATION AND AMONG VARIOUS DEMOGRAPHICS . THIS INDICATES THAT EVEN THOSE WITH HIGHER EDUCATION ARE NOT IMMUNE TO THE EROSION OF FINANCIAL LITERACY SKILLS , WHICH ARE ESSENTIAL FOR ECONOMIC INDEPENDENCE AND INFORMED DECISION- MAKING .
THEIR WORK IS CORROBORATED BY THAT OF THE HUMAN SCIENCES RESEARCH COUNCIL ( HSRC ), WHICH HAS POINTED TO A NOTABLE DECLINE IN THE NATIONAL AVERAGE FINANCIAL LITERACY SCORE THAT PREDOMINANTLY AFFECTS WOMEN , THE YOUTH AND THE LESS EDUCATED DEMOGRAPHIC GROUPS DESPITE ONGOING FINANCIAL EDUCATION INITIATIVES .
MOREOVER , A REFLECTION FROM THE UNIVERSITY OF CAPE TOWN ' S GRADUATE SCHOOL OF BUSINESS ( UCT GSB ) EMPHASISED THE SIGNIFICANT ECONOMIC BOOST THAT COULD BE ACHIEVED THROUGH ENHANCED FINANCIAL LITERACY , HIGHLIGHTING THE NEED TO INTEGRATE FINANCIAL EDUCATION WITHIN BROADER ECONOMIC DEVELOPMENT STRATEGIES . WE NEED TO REVERSE THIS TRAJECTORY .
THE CORRELATION BETWEEN FINANCIAL LITERACY AND ECONOMIC INDICATORS SUCH AS POVERTY LEVELS , BUSINESS SUCCESS AND GROSS DOMESTIC PRODUCT GROWTH CAN NO LONGER BE IGNORED .
FINANCIAL LITERACY EDUCATION , WHICH ENCOMPASSES A SPECTRUM OF SKILLS , INCLUDING BUDGETING , SAVING AND MANAGING DEBT , NUMERICAL SKILLS , FINANCIAL PRODUCT AWARENESS , KNOWLEDGE AND USAGE , AS WELL AS FINANCIAL PLANNING AND WEALTH BUILDING IS CRITICAL FOR INDIVIDUALS AND FOR OUR SOCIETY ..
DESPITE LEGISLATIVE ACTIONS , REGULATORY FRAMEWORKS , AND INVESTMENTS IN FINANCIAL LITERACY EDUCATION AIMED AT FOSTERING AN INCLUSIVE FINANCIAL ECOSYSTEM , THESE MEASURES ALONE HAVE PROVEN INSUFFICIENT .
A 2021 HSRC REPORT FOR THE FINANCIAL SECTOR CONDUCT AUTHORITY ( FSCA ) HIGHLIGHTS THE ACUTE ECONOMIC CHALLENGES AND FINANCIAL DISTRESS PREVALENT AMONG