Prime Cabinet Secretary Musalia Mudavadi has called on Kenyans to prioritise saving as a means to bolster the nation's economic prosperity.
Speaking at the launch of the 2023-27 National Social Security Fund (NSSF) Corporate Strategic Plan, Mudavadi stressed the importance of cultivating a culture of saving to drive economic transformation.
He highlighted the detrimental effects of excessive income consumption and underscored the need for a paradigm shift towards savings.
“We have to break away from the norm and inculcate a savings culture within our society and especially the median age of our population. For us to strategically build a workforce that will yield economic returns away from the habit of consumption this is the way to go,” Mudavadi said.
Mudavadi stressed that a workforce committed to the country's economic advancement must prioritise building a robust savings capacity.
While acknowledging the strides made by Kenyans in saving for the future, Mudavadi urged for further efforts to match the savings rates of other African countries.
He noted that Kenyans are catching up with other African countries that have a good record of savings for retirement.
“Tanzania leads with the highest contribution to retirement savings, requiring a 10 per cent savings of one's gross earnings with the employer matching it. Similarly, Uganda mandates a 5 per cent individual saving matched by a 10 per cent employer contribution, while in Rwanda, the individual contribution is 5 per cent with the employer adding 3 per cent,” he remarked.
Mudavadi also disclosed that plans are underway to enhance benefits payable by NSSF to meet the dynamic needs of Kenyans.
He said such initiatives are particularly significant given the evolving challenges within the workforce, especially for SMEs, which constitute a significant portion of Kenya's employers.
He said the government through NSSF, is taking proactive steps to support individuals and families during times of transition and uncertainty in the workplace a gesture that social security funds are encouraged to advance.
“These efforts, backed up by technology and innovation, will drive efficiency and effectiveness,” he said.
“Inflation is always an issue and when we plan how to grow our funds, we must always be prudent in our management, professionally and strategically so that the returns that will feed our pension funds can hedge against inflammatory pressures."
