Invest In Long-Term Savings

President Festus Mogae has urged Batswana to invest in long-term savings rather than the short-term consumption, which leads to a lot of indebtness in the country.

Speaking during the 10th anniversary of the Botswana Life product, Mompati Products, Mogae said a lot of Batswana spend their money on cars and other consumables and live without a life policy and added that this leads to people depending on government for handouts and assistance.

"Reports suggest that household savings have been declining, with a consequent increase in debt, over the past decade. A lot of us have seemingly adopted a short-term view of life in which we cater for our daily desires in the hope that tomorrow will somehow take care of itself," Mogae said.

He is of the view that most Batswana see no value in investing in an insurance policy, which has a long-term benefit and offers protection on things that may happen in the future.

"This has resulted in an upsurge of borrowing, which has also brought, in its wake an increased burden of unsatisfied debt. This can lead to a vicious cycle in which the consumers become steadily impoverished by their unsustainable consumption," he added.

Mompati insurance products is an universal life cover that was initiated by Botswana Life in 1994. Its benefits include extended family funeral cover, hospital cash and the dreaded disease benefit and the programme has so far been bought by over 120 000 people.

"The decline in savings, has occurred at a time when our country can least afford it and reduced levels of economic growth, combined with other socio-economic challenges, should have instead been pushing us all to a greater appreciation of the need for individual and collective prudence," Mogae said.

Mogae, who also claimed to have invested in Mompati, hailed the products because they met the special needs of both the local market and the local community.

He advised insurance companies to understand the societies that they want to invest in first.

"Another quality that local businesses can further capitalise on is the knowledge of their society. Contextually, this can knowledge encompass a range of qualities such as companionship, reliability, confidence, common purpose, trust and security. In this respect one can commend the management of Botswana Life for choosing a name that goes some way towards defining their service, insurance, in terms of community perceptions and values," he said.

He said that the product is relevant to the country, which is afflicted by serious catastrophes like HIV/AIDS and road carnage, which threaten the society with early deaths.

Mogae, therefore, said that the product would go a long way in assisting government, to cater for the needs of the society like orphans.

He also urged Botswana Life, which is competing against other companies in the industry to know the market first in order to deliver the best products in the competitive market.

According to Mogae, understanding the market would enable Botswana Life to have a competitive advantage over other competitors.

Mogae also revealed that government has established a regulatory framework to monitor the performance of registered insurance companies, as there is always potential danger that poorly informed people might fall victim to insubstantial schemes.