Wasteful and irregular expenditure in our country is rampant and has been well documented amongst our people. The trend of irregular expenditure and financial leakages has also been recorded and well documented in our public institutions and state-owned enterprises. All these can be attributed to financial illiteracy.
We write this commentary at a time when we can no longer afford to waste any of the limited resources be it money or human capital that we have as a nation.
Even before the arrival of the Covid-19 pandemic our resources – more especially public finance were slowly eroding. Just a few months ago, April to be precise, our public finance custodian – Minister Thapelo Matsheka revised his February budget slashing the projected revenue for the 2020/21 financial year from P62.4 billion to P48.8 billion. This surely is not good news and it seems like more bad news is coming our way.
As we write this commentary this week, the government’s Economic Advisory Committee has cautioned of an economic crisis more serious than ever.
We been told that almost a month after re-opening the economy, other sectors such as tourism remain in the state of paralysis. Not all economic engines are humming as we had wished that they do.
We are in total agreement with the Government Advisory Committee that the Covid-19 pandemic has not only caused uncertainties in our shores but has also highlighted the vulnerabilities of our economy. If one is to state the well known facts, our economy is characterised by a narrow economic base anchored mainly by diamond sales while on the other hand there has always been a worrying increase in budget deficits in the past three or so financial years.
So where does all these leave us as a nation? What need to be done for us to atleast ‘survive’ the years to come? In the government Economic Recovery and Transformation Plan shared this past week is authors reiterate the need to diversify our exports. They suggest that we reduce the current high-level dependence on diamonds, which account for over 90 percent of country’s total exports. While that is ideal perhaps one could call for the authors to also consider advising the government on the need to go ne step back and interrogate our spending patterns as a nation – both the personal and state level. What guides it and why do we continue to get so many financial leakages and wastage?
History does shows that lack of basic financial understanding could lead to wrong choices that could affect both a person’s career and personal life. Some of the common problems people with low financial literacy experience is that they do not understand the importance of investing and saving for the future.
From where we stand it is quite evident that for those citizens that are lucky to have jobs and earn a few Pulas at the end of the month end up with zero gains. (Hand to mouth scenario). This is partly due to lack of understanding of finance matters – Without basic understanding of finance, wrong and misinformed decisions prejudicial to businesses and homes are regularly made.
We strongly believe that well-designed financial education initiatives can reduce demand-side barriers to more effective financial inclusion and can empower vulnerable individuals economically, so that they can better manage household resources and develop income-generating activities which would ultimately feed to the main national economy.
One can only hope and encourage our legislatures to advocate for change in basic education curriculum that would see the introduction of financial literacy training in our public schools – a move that we strongly believe will bolster financial knowledge of our future generations.
There is no single doubt that the root cause of poverty and wide gap in economic incomes in this country is a result of the many misguided and unsustainable citizen economic empowerment programmes that our government has pursued over the years. These policies include those that failed to include financial literacy into our public schools’ curriculums.
It is quite evident that some of the people who hold public offices are not well versed on issues of financial management even at personal level. This is why we have many leakages at SOEs and public institutions led by some of these individuals. Our level of interest in enterprise development as citizens of this nation also expose our education curriculum. Many of us have been trained to become employees. This has affected the rate at which enterprises are developed in this country.
This has also affected the rate of success of citizen owned/ran enterprises. This is why and how Covid-19 pandemic found us in the worst economic state. So while one could agree with the government advisors on the need to diversify away from diamonds revenue, the #Bottomline is that we cannot just do that without capacitating the indigenous citizens. Such capacity building program should not leave financial literacy behind – we need it now more than ever.