Rwanda is betting on a combination of buoyant financial markets and new technology to deliver products which could double savings rate by 2020.
The target is to increase the savings rate to 20 per cent of GDP, a figure which has always been on the cards, but has been severally missed.
With gross domestic product currently at $8.6 billion, savings would need to increase from the current level of $877.2 million to $1.7 billion in 2020 to meet the target.
The government has partnered with financial institutions and other stakeholders to mobilise the critical mass of savers to tap into the investment vehicles which are in place during the savings week themed “Our savings Our Wealth” which started Monday.
The diversified pensions sector with public pensions body Rwanda Social Security Board (RSSB) dominating, insurance firm offering long-term savings, capital market and investments trusts offer opportunities for long term savings.
“There’s no country that develops without savings. Different countries have different ways of promoting savings. In our case, we are using all possible channels to ensure that we have more people who save,” said Claver Gatete, Finance and Economic Planning Minister.
“We passed a law that allows private pension fund providers. We are also working with co-operatives to mobilise savings. The 10 year Capital Markets Development Strategy are some of the huge impact vehicles to trigger savings,” said Mr Gatete.
The challenge on the market is that voluntary pension’s fund which offers hope to rope in the informal sector has not attracted many providers, living out millions of Rwandans out of the savings bracket.