Namibians are turning to debt to supplement their income in the face of the raging coronavirus pandemic that has impacted economic activity, a new survey from Old Mutual has revealed.
“A reality that emerged was that debt had become a lifeline for many Namibians. It is therefore not surprising that the ripple effect of the current financial situation has not only created an environment of constant stress, but has also led to a cycle of debt. Over half of the surveyed participants indicated that buying on credit had become a part of life as they just could not make ends meet,” Ashante Manetti, Old Mutual Namibia Acting Marketing and Communications Executive said.
The development, according to the Old Mutual Savings and Investment Monitor survey, has seen Namibians tapping into their savings and while cutting back on luxuries and entertainment.
“While a third of those surveyed had dipped into their savings and another third had fallen behind on their household bills. The three things that many had cut back on were groceries, entertainment, and clothing.”
Manetti said the survey findings had shown that COVID-19 has worsened the plight of many Namibians who have also witnessed an increase in the number of dependents.
“The results showed that a quarter of those surveyed lived with their parents while 80% said that they had children who are dependent on them. Similarly, a quarter of the participants highlighted that since the emergence of the pandemic they had started financially supporting more people.”
Job security, according to survey findings, was also found to be an area of concern for many Namibians, with some having pursued various income generation initiatives to supplement their income.
“It emerged that a significant number of Namibians faced many financial adversities in 2021. This forced them to take a hard look at their financial position and the plans they had in place to handle the challenges placed before them due to Covid-19. Out of the sample, 58% feared the possibility of losing their job or income while 68% were concerned about their job security. Therefore, it is understandable why 33% of the participants had taken on an additional job or business or done freelance work on the side in addition to their permanent or regular job to supplement their income,” Manetti said.
The Old Mutual survey, however, found that almost 76% of the respondents agree that the COVID-19 pandemic had made them more aware of the need for protection cover such as medical aid, life insurance and funeral cover.
“This could be attributed to the current financial predicament that many Namibians find themselves in. It was however encouraging to see that close to half of the respondents believed that the Namibian economy would improve soon,” she said.
The primary objective of the survey was to better understand the saving behavior and financial attitudes of working Namibians, with specific reference to the ongoing impact of COVID-19.
