How do rural people save and invest traditionally?

14 September 2018 | Ekonomie
From income and expenditure surveys we know quite a lot about what people earn and spend from day to day. The surveys also tell us about sources of income.

By contrast, less information is collected on what people save or in what they invest. That seems odd. Why should we pay scant attention to assets used for future contingencies?

Do we assume that many families don’t have real savings and investments, or that planning for the future is neither a priority nor a practice? Perhaps those are our presumptions about rural people who appear poor and seem to lead day-to-day subsistence lives.

Those assumptions are mistaken, but how wrong is hard to say. I am not aware of any study to have targeted directly the question of how rural families save and invest traditionally in Namibia, but here are some observations that indicate that they do much more to prepare for the future than we think.

Options

First and most obviously, crop-growing households save food stocks, often going to great lengths to make sure that the reserves last as long as possible. Not surprisingly, stored foods are those that remain edible over long periods. Magnificent omashisha or iigandhi storage baskets were developed to help people overcome famines, some of which devastated populations in the North in the first half of the early 20th Century and before.

Second, livestock are largely used as savings and investments. This may be the case throughout Africa, especially among agro-pastoralists (see the essay on the purpose of livestock in the edition of Market Watch on 13 July 2018). An interesting report on financial inclusion released recently by the Namibia Statistics Agency contains useful information on the uses of livestock.

However, not everyone has livestock, especially pigs, goats, sheep or cattle that have considerably greater savings value than chickens. And among those who do keep animals, the majority have few livestock. As with other kinds of wealth, livestock ownership is highly skewed in rural households. Cattle serve as long-term investments over years, smaller goats and sheep as savings over shorter periods of months, while chickens are ‘cashed-in’ to meet more frequent needs for cash.

Security

Third, considerable security comes from social networks formed in and around extended families. Membership of a network offers degrees of access to land, livestock and help from a package of assets, capital or savings. Substantial insurance value can come from being able to draw on that package when needs arise.

Families also supply land and livestock – as start-up capital – to young men when they mature, marry and start their own more nuclear families. As with food stocks and livestock, family assets vary in value, and some members have greater access to the assets than others.

For those interested in how the poor make a living and their use of credit, read Portfolios of the Poor by Daryl Collins and others. It is an enlightening book, which describes the substantial number and variety of financial instruments that poorer families use to save, as well as to lend. For those of us who are wealthy and presume to be clever, the book provides sobering perspectives on the astuteness of the poor.

There is still much to ask and learn about how Namibians save and invest. If livestock, family land and social networks clustered literally and figuratively around the ‘village’ are important investments in rural areas, how might people retain or transfer those assets when they move away to urban societies? How are new social networks created? And how do urban people re-establish access to secure assets if they move back to the village?

Soortgelyk

 

Namibia resistant to Eskom power woes

2 ure gelede | Energie

NDAMA NAKASHOLE NamPower has assured Namibians that load-shedding in South Africa will not affect Namibia.NamPower issued a statement two days after South Africa’s cash-strapped power...

Staatshospitale mank aan voorraad

2 ure gelede | Gesondheid

Henriette Lamprecht - Betalings vir verskaffers van skroewe, penne en prosteses vir ortopediese operasies by die twee staatshospitale in Windhoek word “by tye” vertraag wat...

Ekspo gee volhoubare toerisme woema

2 ure gelede | Gebeure

Volgende jaar vind die Namibië Toerisme Ekspo (NTE) vir die 21ste keer plaas, en sal op herwinning fokus.Dit sal van 5 tot 8 Junie by...

Rundu: Verdrink in vullis of ly dors

2 ure gelede | Regering

Catherine Sasman - Rundu se strate en sypaadjies het in onooglike, stinkende vullishope ontaard omdat die dorpsraad noodsaaklike dienste afskeep.Dít om sy skuld van N$60...

Ondersoek staatskaping, eis amptelike opposisie

2 ure gelede | Politiek

Ronelle Rademeyer - Die sluier van geheimhouding oor Namib Desert Diamonds (Namdia) en berigte dat mnr. Tom Alweendo, minister van myne en energie, nie geweet...

Weer vir 15 November 2018

2 ure gelede | Weer

BINNELAND: Sonnig en bloedig warm in die verre Noordooste en die ||Kharasstreek. Elders sal dit gedeeltelik bewolk en baie tot bloedig warm wees. Enkele ligte...

Huurbeheerrade aangestel

2 ure gelede | Ministeries

Catherine Sasman - Ná vele haakplekke en vertragings het die ministerie van nywerheidsontwikkeling, handel en SME-ontwikkeling vyf huurbeheerrade in vyf streke aangestel wat sedert Maandag...

Outjo se panga-moordenaar kry lewenslank

2 ure gelede | Howe

Ronelle Rademeyer - Die man van Outjo, wat erken het hy het sy meisie in 2015 vermoor deur haar verskeie kere met ’n panga op...

N$1,8 miljard nodig vir Etosha-heining

2 ure gelede | Ministeries

Ellanie Smit - Die heining om die Etosha Nasionale Park sal sowat N$1,8 miljard kos om te voltooi. Dít volgens 'n verslag van die...