Importance of financial literacy for African youths

Access to quality financial education, which has become one of the most essential life skills in the modern society, is an obligation that we owe today’s youth.

The youths are daily advancing in age with very poor financial skills that blindfold and deny them access to certain opportunities that abound. This ignorance is evident in their inability to select the right financial products for them.

It is important for us to note that the young age is the best time to secure financial future. A saying goes, “The best time to groom an individual is when they are young.” This is because the training and decision taken by children and adolescents form a bedrock in them and go a long way in influencing the society in which they find themselves.

Statistically, there are over 600 million young Africans about the age of 25, who are expected to be well-equipped with financial skills for the smooth socio-economic running of the society.

The underlying issue is that a lot of individuals still don’t see the need to equip the young ones with necessary financial skills that will help them to plan for the future. Hence, in today’s article, we will be sharing top reasons that we hope will convince our readers that financial literacy is very important for African youths.

Financial literacy (the ability to comprehend the rules of money and effectively use various financial skills that include but not limited to saving, budgeting, investing, and financial management) is a skill lacking in most African youths today. As a result, they get involved in irrational spending and financial activities, which leave them with nothing but frustration.

Lack of financial literacy is a challenge for both the developed and developing countries in Africa. S&P’s Global Financial Literacy Survey revealed that most African countries score badly in terms of financial literacy. According to the report, Botswana has been observed to be the most financially literate country in Africa with 51 per cent of its youth financially literate.

Financial literacy goes a long way in instilling healthy financial habits in youths at the early stage of life. This will help to properly mould their financial mindset and behaviour to align them with long-lasting financial objectives and get rid of poor financial habits that they must have copied from the people around them.

Living a financially-stable life is one of the main reasons the young ones should be financially literate. Possessing necessary financial skills will help the youths in budgeting, managing debt, investing, saving and even making adequate retirement plans.

More so, financial literacy will help to put our youths in total control of their finances, to confidently and knowledgeably participate in the financial market through investing in certain products that match their long-term financial goals.

It will, further, contribute to the stimulation of a lot of economic activities, which will result in better regulation of the finance industry.

In summary, financial literacy helps to further strengthen the determination of young people to properly manage their money by explaining to them, in detail, the relationship between today’s proper financial management and long-term personal success.

It is, therefore, very important to set up programmes that will gather the youths and continuously train them into becoming better financial managers. These programmes should be open, simplified and made practical, so that youths from different economic backgrounds can access them.

This is why not-for-profits like GoDo Hub set up programmes that will specifically handle the financial literacy issues within Africa.

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