Approximately half of Namibian consumers (49%) rely on a single source of income while 29% are considered polyjobbers or are engaged in additional side jobs or contracting work, key outcomes of the Old Mutual Financial Services Monitor (OMFSM) reveal.
OMFSM is an annual study, which offers invaluable insights by focusing on a key cohort in society, namely employed Namibians, who account for about 28% of the Namibian population, aged between 18 to 65 with an income of N$3 000 or more and reside in urban and peri-urban areas.
According to the study almost a quarter of Namibian consumers use their savings as a source of income.
A striking finding is that about 40% of working Namibians currently have personal loans. These loans are primarily used to cover unexpected expenses (47%), pay off other debts (38%), manage day-to-day expenses (36%), or make specific purchases. Education costs, household maintenance, funeral expenses, and medical and health-related expenses are the primary reasons for taking out personal loans.
A significant proportion of individuals (75%) report earning the same or less income than they did three years ago, prior to the pandemic. In real terms, this means most working Namibians have experienced a decline in their income.
Furthermore, the survey highlights that 42% of Namibian consumers continue to experience significant financial stress. Notably, lower-income earners are more susceptible to financial stress, with many having to provide financial support to extended family members due to the lingering impact of the pandemic. An astonishing 6 in 10 (60%) Namibians find themselves in the “sandwich generation,” financially supporting both children and adult dependents.
Income security is identified as the top priority for Namibian consumers, followed by cost-cutting measures and paying off debt. Notably, emergency savings have gained importance in 2023, with a 12% increase since 2021, demonstrating a heightened awareness of the importance of financial preparedness.
The survey highlights that consumption/living expenses (48%) accounts for nearly half of Namibian household spending, with debt servicing (19%) makes up a significant portion of expenditure, equal to that of savings.
When it comes to retirement savings, the report suggests that there is room for improvement. Less than half of all workers are actively saving for retirement, and there is low confidence in the adequacy of their retirement savings. Despite a significant number of respondents not taking any action to save for retirement, there is an expectation that children or the government will provide support during retirement.
In terms of financial goals, emergency savings, saving for children’s education, saving for a better home, and securing their family’s future are the top priorities among working Namibians. Retirement saving, although important, is not the primary savings goal, especially among younger and less affluent individuals.
“In these challenging times, Old Mutual Namibia is dedicated to not only understanding the financial landscape but also actively addressing it. Through initiatives like the Old Mutual Sustainable Economic & Empowerment Drive (OM SEED 2.0), we are empowering entrepreneurs to create employment opportunities. The OMF Indaba serves as a vital platform for fostering important conversations, ensuring that the voices of our community are heard” stated Mignon du Preez, Old Mutual Namibia Group Marketing, Public Affairs and Sustainability Executive.
Du Preez continued by saying “Our internship programme, on the other hand, plays a significant role in providing meaningful employment for first-time graduates as they embark on their journey into the job market. The Old Mutual Financial Services Monitor sheds light on the challenges faced by working Namibians and underscores the importance of these initiatives in improving financial well-being within our nation.”
The Old Mutual Financial Services Monitor provides invaluable insights into the financial landscape of working Namibians. It highlights the financial challenges of Namibian’s, the importance of financial security, and the need for accessible and relevant financial information.