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<p><strong>By: Herman Lombard, Founder and Executive Director of African Unity</strong></p>

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<p>Managing household finances for yourself and your family is a daily challenge - one of the many reasons that “adulting is hard”, as the kids would say. In South Africa’s tough economic context, with hard times set to continue for the foreseeable future, instilling the country’s youth with a solid foundation in financial management might be the most important thing we can do for them.</p>

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<p>“South Africans tend to be big borrowers and poor savers” says Herman Lombard, Founder and Executive Director of African Unity. Levels of financial literacy are as low as 40%<a href="http://www.nids.uct.ac.za/images/papers/2019_09_NIDSW5.pdf" target="_blank" rel="noreferrer noopener">[i]</a>. In addition, only 51% of South Africans manage to accumulate any savings for emergencies<a href="https://www.oldmutual.co.za/docs/default-source/personal-solutions/financial-planning/savings-and-monitor/old-mutual-savings-and-investment-full-report-2019.pdf" target="_blank" rel="noreferrer noopener">[ii]</a>, and a mere 48% credit active consumers are up to date with their repayments.<a href="https://www.fanews.co.za/article/company-news-results/1/old-mutual/1049/financial-literacy-key-to-south-africa-s-inclusive-growth/23875" target="_blank" rel="noreferrer noopener">[iii]</a> Lombard suggests that these figures reveal “South Africa’s levels of financial literacy are low.”</p>

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<h3><strong>Teaching financial literacy in schools</strong></h3>

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<p>“When it comes to teaching children about finances, it's best to start early,” says Lombard. Financial literacy should be taught as a core element of the school curriculum<a href="https://www.fanews.co.za/article/company-news-results/1/momentum/1067/start-teaching-financial-literacy-at-high-school-level/27219" target="_blank" rel="noreferrer noopener">[iv]</a>, so that by the time they leave school, learners are equipped with the tools they need to survive a complex and unpredictable economy.</p>

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<p>However, in the South African curriculum, financial literacy is only compulsory for learners in Grades 7, 8 and 9, and is not compulsory for older learners nor taught as part of the foundation phase curriculum.</p>

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<p>Furthermore, South Africa’s educational resources are thinly and unevenly distributed, with fewer resources going to the learners who need them most. Although education receives the greatest share of government spending, the concentration of poor learners in disadvantaged areas means that the resources per learner in these areas is inadequate and most learners leave school without the necessary basic skills and core competencies they need.<a href="https://www.usaid.gov/south-africa/education" target="_blank" rel="noreferrer noopener">[vi]</a></p>

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<p>In this context corporates are stepping up to the plate. Lombard believes that strategic investment in public schools is key to growing the South African economy and ensuring a sustainable and prosperous future for all South Africans. “Increasingly, private corporations are recognising that investing in education is necessary if we are to achieve inclusive economic growth” says Lombard.</p>

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<p>In 2018, companies spent about R9.7 billion on corporate social investment (CSI) in South Africa, with 44% devoted to education—the most popular destination for CSI investments.<a href="https://www.bizcommunity.com/Article/196/356/185371.html" target="_blank" rel="noreferrer noopener">[vii]</a></p>

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<p>As part of the company’s CSI activities, African Unity Life has launched its Free Financial Education (FFE) initiative, MoolaFit, to teach financial literacy to grade 11 learners in the Eastern Cape, KZN and North West, focusing on core competencies including budgeting, insurance, banking and making smart financial choices.</p>

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<p>“The programme benefits both learners and teachers, who can apply the lessons on financial planning, investment and debt management to their own household budgets”, says Lombard.</p>

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<p>”Children can learn simple financial tips and good practices even before they start school” says Lombard, adding that “parents play a vital role in teaching financial principles is why African Unity Life plan to also assist adults with financial literacy by hosting the financial fitness workshops to their staff.</p>

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<h3><strong>More investment from corporates is needed</strong></h3>

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<p>However, while some companies have risen to the challenge, the burden of teaching financial literacy still largely falls on government and NGOs. Lombard argues that investing in education is both a moral and an economic imperative, and corporates can, and must do more. “By ensuring that every child leaves school with a solid understanding of personal financial management, we can help those individuals achieve financial security, and allow them the freedom to contribute to building stronger local economies.”</p>

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<p>“It’s an investment in the future of the individual learner, the future of the corporation, and the future of the South African economy”, he concludes.</p>

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