Analysts and commentators are at one that South Africa's abysmal savings rate of 16 percent of GDP needs to improve to around 25 percent and a core strategy to do that is educating the youth, as well as more mature citizens stuck in their old ways.
This comes as South Africans' poor reputation as savers continued in the first quarter of the year via a decline in the savings rate to 16 percent of GDP from 16.3 percent in the fourth quarter. It comes after steady increases had been seen since the first quarter of 2009 when it was at 14.9 percent.
"While government and corporates are saving, individual South Africans are not and the trend appears to be getting worse. The fundamental reason for this differential lies in consumer behaviour and a number of measures need to be adopted to develop a savings culture in this country," says Elias Masilela, a director at the South African Savings Institute (Sasi).
Chief economist at Standard Bank, Goolam Ballim, says that more than 90 percent of South Africans are seeing a decline in the quality of their lifestyles on retirement, but boosting the country's savings rate remains complex.
More financial literacy
"It is a multi-factored dynamic for example, sometimes people have to subsidise inadequate public services, while a large number of society at the margin have little left after their core expenditure," he says.
He says the current savings rate is not sufficient to fund the desired level of investment and the country is thus dependant on foreign investment. The savings rate is a full ten percentage points off the required, or benchmark, rate of 25 percent of GDP for an economy like SA's.
But Ballim feels that one of the key solutions is more financial literacy in mainstream households and within general households.
Masilela adds: "Education is a core strategy and campaigns have to be directed at helping people to understand the importance of savings.
"As more people move into gainful employment, families begin to have more money that can be directed towards savings. Therefore, job creation is seen by government as a key vehicle for encouraging savings."
"Saving is all about discipline and people spending less than they earn," he says.
The hard facts
General Manager for Investments at Absa Investments, Craig Pheiffer, laid out the hard facts with no embellishment.
"An individual that retires at the age of 65 on an annual income of R500 000 with a need for 80 percent of that as an ongoing salary, will need approximately R8-million to generate the required income for a comfortable retirement. In most cases, the employer Pension Fund does not reach such an amount," said Pheiffer.
Saving and investing needs to be structured in such a way that it can overcome the ravages of inflation in the longer term.
Highlighting the seriousness and the importance of saving, he said: "If inflation were to average 4.5 percent, the midpoint of the South African Reserve Bank's target inflation rate range of between three percent and six percent, the purchasing power of anyone's money today would halve in just 15 years."
Elizabeth Lwanga-Nanziri, CEO of Sasi, feels entrepreneurship shines as a potential pathway for sustained economic growth and recovery.
A generation of entrepreneurs
"There is a need for creating both a culture and a generation of entrepreneurs and self-employment projects. Education and Financial Literacy play a key role in the development of skills and behaviour patterns that will allow future entrepreneurs to start and grow businesses in a responsible and inclusive manner.
"The starting point is an individual's own savings and reduced dependency on the state," she said.
South Africa's Saving's Month, which began for one month on 20 July has drawn to a close. A lot of work still needs to be done to boost the savings rate.
Government laying an enabling platform for jobs and entrepreneurs will be a step in the right direction and corporates becoming more innovative will help too.
But individuals also need to play along if and when they can ? debt levels at 78.4 percent are simply unsustainable.