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Johannesburg - South Africa's low saving rate is holding
the country back compared to its peers, Finance Minister Pravin Gordhan said on
Wednesday.
"(C)ompared with our peers internationally, South
Africa's savings rate has not performed well," Gordhan said at the SA
Savings Institute's 10th anniversary in Johannesburg.
South Africa's gross savings were 16% of gross domestic product (GDP)
in 2009.
This compared to China's saving rate of 52% and Russia's rate of 22%.
Gordhan said it was no coincidence that these countries'
economies were leading the way.
South Africa needed to increase its saving rate if it were
to become the "China of Africa", he said.
The country needs to ask questions about the "consumerist society" it has become - "a society that wants to acquire things at any cost" and which is taking on increasing debt.
"(T)his type of acquisitiveness also fuels the
fires of corruption as people look for the quickest, easiest way to get things
rather than to save for them".
He asked how South Africa managed to have a saving rate of
30% of GDP before 1994.
"(A)fter 1994 we have a much more prosperous
society; why did the savings rate fall?"
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, which can easily reverse and pose risks of volatility....
today the whole issue of volatile capital flows is one of the biggest
challenges faced by emerging markets."
