19 March 2014

Nigeria: Financial Literacy Crucial to Nigeria's Economic Growth

FINANCIAL literacy among Nigerians especially the young people will foster economic growth and development even as the country seeks the attainment of financial inclusion in the economy, said the Managing Director/Chief Executive, Fidelity Bank, Plc. Nnamdi Okonkwo.

Speaking at the weekend while delivering a lecture to students of Girls' Secondary School, Awka, Anambra State, Okonkwo noted that financial literacy will help young people gain financial freedom through prudent management of money and clear differentiation of needs and wants.

Specifically, the bank chief who spoke on "Inspiring Young People towards Financial Literacy and Freedom," on the occasion organised by Fidelity Bank in partnership with Junior Achievement Nigeria to mark this year's Global Money Week, (formerly Child and Youth Finance Week), a worldwide money awareness celebration from March 10 to 17, said one important reason young people must be financially literate is to enable them manage money and be free from poverty and some of the self-made worries that money can solve later in life.

He explained that the initiative is aimed at globally engaging children on aspects of financial education including saving, creating livelihoods, gaining employment and entrepreneurship.

He said that the programme will make young people make the right financial decision early in life, as they would have become smart enough about how to make money and manage same responsibly as they grow older.

In Nigeria, the Bankers' Committee designated March 13 as Financial Literacy Day. The day is being marked to focus attention on children and youth in primary and secondary schools nationwide and to empower them by enhancing their financial knowledge and planning skills. Taking them down memory lane when trade by barter was in vogue to the evolution of money as a means of exchange, Okonkwo who itemized the functions of money to include its use as a store of value and payment for various goods and services among others, said that it is only through financial literacy that people can make their money grow.

"One irrespective of profession and vocation can work for and earn income, but the person must also learn to manage the money so that he doesn't become poor," he said, stressing that income earning and expenditure as part of financial education means that one must differentiate between what he wants and what he needs at a given point in time requiring the making of choices.

"Whereas needs are things we cannot live without, wants are things we would like to have but can live without them due to constraints," he said, adding that the basic rule in financial management is not to spend every money one earns. "The day you start working is the day you start planning for your retirement. Discipline is required and you must save at least 25 percent of your earnings."

"Budgeting is planning how to spend your money. It must be written and subjected to expenditure plan. A budget contains one's income and the different possible expresses and how much you will spend on each. Money saved or invested is not available for spending," he said.

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