South Africa is trailing behind its BRICS counterparts in terms of Gross national Savings rates. South Africa stands at around 16% of gross domestic product, fellow BRICS members China and Russia are standing at approximately 52% and 22% respectively. South Africa saw a decline from approximately 30% GDP to savings ratio before 1994 to the current level of approximately 16%. The trend has been very similar in comparison with India. The other similarity between these BRICS countries is that they all have seen very rapid growth. All economic indicators have indicated that the economies of the BRICS nations are very strong and have been performing at a superior level to South Africa. South Africa compares even worse with regards to household savings versus its BRICS counterparts. Various arguments and explanations as to why this is so come up on a number of social, government and corporate platforms. The “aspirational” culture is widely blamed for the poor showing of South African households when it comes to savings. The South African financial sector is very sophisticated and is widely blamed for the encouraging consumption and even worse credit consumption. An analysis done by Ecnometrics found that amongst the significant determinants of household saving rates are: uncertainty (inflation), income level, public sector savings, development’s in the global economy and government economic policy. The study revealed that the above factors were very influential in the rapid economic growth and increased per capita net worth seen of the most BRICS countries. The correlation between saving/investment and consumption/irresponsible consumer behavior is indicated to be a very strong one and takes a very longtime to evolve. This requires outrooting certain societal norms, attitudes and culture and replacing it with a brand new behavior, beliefs and aspirations. Role players that emerge as strong drivers in this phenomena is the societal culture however the other role player who prove to be prominent are the policy makers. In most cases the economic and gross national saving rates coincided with major economic policy reforms in the countries that have performed well.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:28676 |
| Date | January 2017 |
| Creators | Mantashe, Zuko Nathi |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Business and Economic Sciences |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, MBA |
| Format | 114 leaves, pdf |
| Rights | Nelson Mandela Metropolitan University |
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