Central Bank decries poor saving culture in Uganda

Amid the celebrations however, the Bank of Uganda (BoU) is concerned over the country’s low saving rates, which it views as a barrier to both individual financial stability and broader economic growth.

According to the FinScope Survey 2023, only 60% of Ugandans currently save, with the majority saving sporadically.

The survey revealed that only 39% of Ugandans save to meet regular expenses, while a mere 14% put aside funds for emergencies.

This limited approach to savings has left many vulnerable to financial shocks and unexpected costs, further undermining their ability to achieve long-term financial goals.

Kenneth Egesa, the Bank of Uganda spokesperson says financial sustainability requires Ugandans to make intentional financial choices that extend beyond immediate needs.

By fostering habits like responsible consumption and strategic investment, he says, individuals can contribute to their well-being while supporting national economic stability.

“Aligning personal financial practices with clear financial goals can help Ugandans achieve gradual improvements in their well-being,” Egesa noted urging the public to embrace savings as a part of their routine.

Low Savings Culture and Economic Challenges

Uganda’s low saving rate, partly attributed to low income levels, high costs of living, and limited financial literacy, continues to be a challenge for the economy.

The World Bank and other institutions have noted that many Ugandans rely heavily on informal saving methods, with a substantial portion of the population saving outside of formal financial systems.

This reliance on informal methods not only limits access to interest-bearing accounts but also increases the risk of financial loss.

According to Bank of Uganda’s Director of Communications, Kenneth Egesa, there is a critical need to adopt modern tools and goal-oriented savings plans, such as automated savings apps and mobile banking platforms, to promote financial inclusion and improve saving habits across all income levels.

Financial Literacy and Awareness Initiatives

In response to these challenges, the Bank of Uganda, in partnership with other stakeholders, has dedicated November 2024 as Banking and Financial Services Awareness Month.

Through financial literacy talks and targeted campaigns, the BoU aims to encourage Ugandans to “live the commitment” by adopting consistent saving practices, sustainable investments, and mindful spending.