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Financial freedom to drive prosperity in Africa

Pat Robert  Larubi - 31/10/2014 03:34 CDT

Gulu, Gulu, Uganda

Barclays Africa today launched a report that shows Africans equate prosperity to achieving financial freedom, as Africa continues to experience growth ahead of other developing economies.

Barclays Africa is among the leading banks on the continent with a presence in 14 African countries. The Barclays Africa Prosper Report captures what 'prosper' means to Africans in 11 of those countries. The survey, which was conducted online, surveyed over 7 000 respondents from South Africa, Zambia, Botswana, Kenya, Ghana, Mozambique, Seychelles, Mauritius, Tanzania, Uganda and Zimbabwe.

Seventy-eight percent of the respondents were between 18 and 35 years of age, representing a significant portion of the 'youth bulge' - the future drivers of the African economy. The youth bulge is a common phenomenon in many developing countries where a large share of the population is comprised of children and young adults thanks to a decrease in infant mortality and steady levels of fertility.

The Barclays Africa Prosper Report identifies that Africa's youth, given the right tools, are set to become the drivers of economic prosperity.

Africans define what it means to prosper

* If given US$100 to help them prosper, 49 percent of respondents would invest it.
* Almost a third would buy a computer (30 percent) and books (24 percent) to help them prosper.
* While lack of finances is a major barrier to prosperity (66 percent), this is also the easiest aspect of their life to change (37 percent).
* Nearly 50 percent of respondents would most likely consult a bank to obtain financial prosperity. Only ten percent said they would consult a family member.

According to Bobby Malabie, Group Executive of Marketing, Communications, Citizenship and Public Affairs at Barclays Africa says:

"The Barclays Africa Prosper Report shows that people work hard for their money and want their money to work hard for them. What is particularly encouraging is that when questioned further, the youth of Africa would rather invest their money to fund further education than to spend it on flashy consumer goods.

"Investment, education and savings are seen by Africans as the main drivers of prosperity to open the doors to economic growth. It is also clear that Africa's emerging youth presents the continent with an unprecedented opportunity to deepen our human capital, and with the right tools, tomorrow's decision makers can unlock Africa's potential."

Providing an independent analysis of the research, Professor Monde Makiwane of the Human Sciences Research Council (HSRC) says:

"A decrease in mortality rates coupled with the youth's connectivity to a global community which is increasingly aided by technology, means we have an emerging youth bulge of Africans that are more optimistic than ever before. Africa's youth are confident they will be around to live their future. Given this optimism, they prefer to spend their money on computers and books to aid their prosperity, rather than making flashy statements in their local communities by parading the latest must-have item."

"The Barclays Africa Prosper Report addresses critical issues of financial behaviour and prosperity that have either been missed or poorly measured by previous social and financial surveys in Africa.

"Encouragingly, one of the most significant findings from this African survey is the high level of savings and investments reported by participants. Almost 50 percent of respondents would save or invest to help them prosper financially, a powerful statistic if viewed in the context of the Asian savings boom," says Makiwane.

Several decades ago, Asia experienced a youth bulge. The continent took advantage of this by creating employment opportunities and mobilising the youth to save. Continued economic growth and a high savings rate have fuelled wealth creation in the region and its propensity to save is exceptional when compared to the United States or Europe. Gross national savings range from a low of 24 percent of GDP in the Philippines to a high of 50 percent in China, compared with 13 percent in the United States and 19 percent on average across Europe(1).

Bobby Malabie (left) Group Executive at Barclays Africa and Professor Monde Makiwane (right) of the Human Sciences Research Council at the launch of the inaugural Barclays Africa Prosper Report on 28 October 2014

Bobby Malabie (left) Group Executive at Barclays Africa and Professor Monde Makiwane (right) of the Human Sciences Research Council at the launch of the inaugural Barclays Africa Prosper Report on 28 October 2014