Pretoria - Finance Minister Pravin Gordhan is worried that South Africans are not saving enough for rainy days.
Compared with people in other countries, South Africans are not putting away enough for the future, but are getting used to a culture of consume now, pay later.
Data indicates that South Africa's gross savings were 16 percent of Gross Domestic Product in 2009. This is compared with China's savings rate of 52 percent and Russia's rate of 22 percent.
"We have become a consumerist society. A society that wants to acquire things at any cost, including high levels of debt. It is time that we ask ourselves very serious questions about the cultural habits that we are beginning to acquire," Gordhan said on Wednesday.
He was speaking in Johannesburg at the launch of the SA Saving Institute's savings month awareness campaign.
There were various reasons for the country's poor savings rate, he said, such as a lack of transparent products and poor financial awareness.
Gordhan said if South Africans could save more, the country would rely less on borrowing funds from other countries to meet its investment needs.
This would make us less reliant on volatile short-term capital inflows for funding, which can easily reverse and pose risks of instability for an emerging economy like ours.
"We need to ask ourselves if we can mobilise our resources as a nation in a way that recognises the importance of savings in reaching our developmental goals."
Gordhan's sentiments were also shared by South African Savings Institute (SASI) chairperson, Prem Govender. However, she noted that there had been a slight "but very noticeable drop" in the debt-to-disposable income ratio from a high of 81.8 percent in 2008.
"According to the Reserve Bank quarterly bulletin, this figure dropped to 78.2 percent in the first quarter of this year, with unemployment at 25 percent for the same period," she said.
South African consumers faced many challenges, including high indebtedness and high unemployment, which Govender said "do not do much to promote saving." Substantial increases in oil prices and social and economic problems have also been counterproductive to encouraging saving.
Govender said saving is a habit which people have to develop, practice and grow over time.
"There's no better time to start saving than now, it's never too late or too little. This is the message that we want to take to both young and old," said Govender.
Gordhan also used the platform to mention government's reforms and initiatives to support and encourage household saving, such as the RSA Retail Savings Bonds.
The bonds were launched in 2004 to encourage citizens to save by providing accessible, safe, no-fee savings products.
According to Gordhan, since then South Africans have invested a total of R9.3 billion in these bonds. There are close to 77 000 active investments in the bonds, and over 37 000 active investors.
Given the success of these products, he said there are plans to introduce a new Top-Up Retail Savings Bond this year, aimed at attracting smaller investors.
Currently, we have two series of bonds on offer - the fixed rate and inflation-linked bonds. Each needs a minimum investment of only R1 000.
"In our interactions with the public, however, we realised that many more people would invest if they had the option to top up their investment rather than have a once-off investment. The National Treasury is therefore working on a new series of bonds, the top-up bonds, to meet this need," said Gordhan.
These bonds would need a minimum investment of only R500 and would also allow investors to top up this investment whenever they could - even with as little as R100.
At the end of the three-year investment period, they would also have the chance to reinvest their pay-out.
Like all retail bonds, they will carry no fees or commission costs at all.
The minister hoped that more South Africans, especially the youth, will take advantage of the competitive rates and the security that the bonds provide.