Results of the latest MasterCard Worldwide Survey on Consumer Purchasing Priorities – Money Management has revealed that Nigerians continue to understand the importance of saving their money, with 95% of respondents committing to increasing their savings in the following six months.
 
Compared to the previous year’s results, this latest finding represents an 8% increase on the 87% of respondents who had similarly committed to increasing their savings in 2011.
 
Now in its second year in Nigeria, the MasterCard Worldwide Survey on Consumer Purchasing Priorities – Money Management includes a series of questions that investigates respondents’ financial planning over the course of the following six months and seeks to determine levels of basic money management skills in terms of budgeting and savings.
 
The most recent survey was conducted between 24 April and 10 June 2012, and involved 11,376 respondents aged 18 to 64 across 25 markets spanning the Asia Pacific, Middle East and Africa regions. On the African continent, the survey was conducted in Egypt, Kenya, Morocco, Nigeria and South Africa
 
When respondents were questioned about their primary reason for wanting to increase their rate of saving over the subsequent six months, 84% indicated that they were wary of the impact that global economic events may have on the Nigerian market and they felt they needed to prepare for unforeseen emergency expenditure.
 
The survey established that a significant 95% of respondents believed that they should regularly save a portion of their monthly income. The allocation of their total salaries that they intended to save in the following six months was diverse, with 26% saving one tenth or less, half of all respondents saving between 11-30%, and 11% saving more than one third of their salaries.
 
“It is clear that Nigerians understand the importance of setting a portion of their monthly income aside,” said Omokehinde Ojomuyide, country manager, West Africa, MasterCard Worldwide. “In fact, it is one of the most important and necessary actions that any Nigerian can take to ensure their financial security.”

The Central Bank of Nigeria (CBN) has emphasized this with its National Financial Inclusion Strategy, through which it aims to achieve a total number of 63 million users of banks’ savings account products by 2020, from the 21 million accounts that were active last year.

Ojomuyide adds that investments, retirement planning, and buying or upgrading a property, were the most popular reasons for saving, with a large percentage of Nigerians saving for more than one purpose.

Reinforcing the positive results around savings were the facts that 94% of respondents believed it was never too early to have a financial plan and 81% agreed financial planning was not just for the rich.

However, the survey revealed that while large numbers of Nigerians understand the importance of planning and saving for their retirement years, and are setting money aside for that purpose, only 37% of respondents have calculated the total amount that they would need to retire to maintain their lifestyle when the time comes for them to stop working.

“Many people think that saving for retirement is something that can be postponed for action later in life,” says Ojomuyide. “However, one of the first steps to take towards financial independence is making adequate preparations for when a person is no longer working, whether this retirement is by choice or from ill health – and the advice of a qualified and experienced financial planner will help Nigerians take the necessary steps to provide for their future.”

The survey also indicated that Nigerians manage their money carefully and effectively. Ninety-four percent believe that they have the ability and understanding to budget their day-day finances, 78% track their spending on a weekly basis and 83% regularly monitor the progress of their investments.

“Even though the survey shows that Nigerians lag with planning for their retirement, it reveals that they understand the importance of budgeting and saving, and more importantly, they are taking steps to include these activities in their daily lives,” Ojomuyide says. “It is this awareness of personal finances, and the knowledge of how to manage money, that will help Nigerians embrace the CBN’s National Financial Inclusion Strategy and its Cashless Policy.”

“Understanding the importance of managing money beyond immediate daily needs is the first step towards owning a bank account, which then opens up the benefits of broader financial inclusion,” she says. “This in turn makes the appeal of a cashless economy even more clear, as the dangers and inconvenience of cash are eliminated, and electronic payments are increasingly embraced.

 “MasterCard is working closely with Government, financial institutions and merchants to make the CBN’s goals for a financially secure Nigeria reality, by making it easy, safer and more convenient for Nigerians of all income groups to put their savings to good use,” she concluded