Veep launches financial literacy week

Spread (lead) September 22/2003

Story: Charles Benoni Okine

THE Vice-President, Alhaji Aliu Mahama, has called on players in the financial sector to ensure that majority of the people understand the products they offer them.
He said although financial service providers, such as the banks, insurance and security companies, were educating the populace through various means, it was not enough to allow the recipients to grasp the full concept.
He made the call in Accra yesterday at the launch of the first National Financial Literacy Week to raise awareness of the need for financial education and how people can better manage their finances.
The launch, which is in fulfilment of the pledge made by the Minister of Finance and Economic Planning in last year’s budget statement to Parliament, is on the theme, “Financial Literacy — Knowledge is money”.
As part of the awareness programme, there will be radio and television discussions which will feature as many of the players as possible, a float, market-to-market campaigns, among others.
Alhaji Mahama noted that “broader concepts of financial literacy implies that people will make better judgements about their financial affairs if they understand the relationship between their own finances and the wider economy”.
The Vice-President recounted the financial upheavals in major economies such as the United States of America (USA) and the United Kingdom (UK) caused by inappropriate mortgage lending to gullible consumers.
“It is against this background that the financial sector strategic plan recommended the launch of an annual financial literacy week to help raise awareness of the range of products and services available to consumers to enable them to better understand and manage their finances,” he said.
Alhaji Mahama said one of the most important and profitable lessons one could learn in life was how to achieve financial security.
“Yet too few Ghanaians have had the opportunity to learn the basics about money in school, at work and even at home,” he said.
The Vice-President was of the view that “if we crave for development as much as we say we do, it behoves us, as a nation and as individuals, to provide opportunities for financial literacy. Experience in more developed economies has shown that financial literacy early in a person’s life leads to financial independence and sound investment decisions”.
He said a survey conducted on the level of financial literacy of Ghanaians revealed that 43 per cent of respondents either did not have full or correct information on what they needed to plan their personal finances well.
Alhaji Mahama said it was interesting to note that the study found out that while the understanding of the concept of principal and interest was weak, respondents exhibited strong knowledge on savings, profit and personal budget.
The Vice-President urged Ghanaians to avail themselves of the opportunities during the literacy week to improve their understanding of financial concepts.
The Minister of State at the Ministry of Finance and Economic Planning, Dr Anthony Akoto Osei, also spoke about the survey, which was commissioned by the ministry, and said its results were particularly bleak among young people between the ages of 18 and 30 years.
He said the most fundamental reason people needed to strive to become more financially literate was to help them to reach their personal financial goals, adding, “Whatever the goal, the pay off to financial literacy is an improved standard of living and a sense of confidence about the future.”
Dr Akoto Osei said becoming financially literate was a long-term process that required the assistance of institutions outside the home.
He said the objective of the week was to raise the issue onto the national stage to improve awareness of the need for financial literacy and expose the need for Ghanaians to acquire financial literacy and expressed the hope that stakeholders would step up their financial education efforts and that the citizenry would be more responsive to financial education.
The Commissioner of the National Insurance Commission (NIC), Ms Josephine Amoah, also raised the issue of awareness creation which, she said, was not enough to allow the public to understand the issues.
She narrowed it down to the insurance sector where, apart from motor insurance which many knew about, not much was known about the other insurance packages.
Ms Amoah said the commission would begin an awareness programme before the end of the year, adding that the forthcoming national Insurance Awards, under the auspices of Corporate Initiative, Ghana (CIG) and the Institute of Social, Statistical and Economic Research (ISSER) of the University of Ghana, and sponsored partly by the Graphic Communications Group Limited, publishers of the Graphic Business newspaper, formed part of the awareness programme.