S.Africa’s improved life expectancy a ticking time bomb - CNBC Africa

S.Africa’s improved life expectancy a ticking time bomb

Southern Africa

by Trust Matsilele 0

South Africa’s improving life expectancy could have downside risks if citizens are not taught to invest early. PHOTO: Benchmark Signs

Over the past two decades, the South African economy has seen opportunities for wealth creation through investment.

Addressing media at a roundtable discussion in Johannesburg, Liberty Life said the economic growth had allowed a broader group of people to be afforded the opportunity to invest. The group added that shifting the paradigm from investment is only for an exclusive audience to an inclusive audience that have the means to invest.

(READ MORE: Liberty sustains upward growth trend)

Sanelisiwe Gantsho, customer experience analyst at Liberty Investments, a division of [DATA LBH:Liberty Holdings Limited] urged the country to promote more investments.

“When looking back at what it took to develop our democracy over the last 20 years; to bring the economy where it is today, we had to focus on reconstruction and development as well as addressing unemployment, poverty and inequality,” said Gantsho.

Gantsho added that the country was seeing a trend where dealing with these issues was still vital to the growth of the economy but where growth is also being driven by other factors such as investment and the South African consumer’s active interest in their personal wealth.

“In looking at this it becomes important to look at GDP per capita - an indicator of individual consumer buying power – as this perspective assists in giving an indication of the investment appetite and needs of the diverse South African population,” added Gantsho.

“So, we look at the years leading to democracy then democracy to date. The last 20 years have seen our national income per capita increase by 40 per cent since the dawn of democracy but has shown a decline since the world financial crisis.”

David Lloyd, managing director of Liberty Investments says the ever-expanding investment market makes it increasingly important to understand what the South African investor is looking for in order to continue seeing positive growth in investment trends over the next 20 years.

Lloyd said South Africa needed to understand the individual. If a persona was allocated to an investment savvy individual, he/she is employed or successfully self-employed and is somewhat financially prudent.

“While some investors may have a high or moderate risk appetite and have time to recover from corrections or fluctuations in the market, it needs to be noted that some may be quite risk averse and would prefer some form of guarantee or limited downside risk,” Lloyd added.

“This could be due to a number of reasons one of which could be an individual’s level of indebtedness, their age or whether the investment term is short, medium or long term. So in other words, how soon the funds would be needed by the one investing,” said Lloyd.

The South African economy remains one of the leading attractive destinations for both savings and investments due to sound economic policies

Liberty Life said the South African economy has been on an upward growth trend from 1994 to present though marginal decline had been seen in the market lately due to the effects of the global recession.

The financial services company said it sought to leverage government interventions on encouraging savings through its Liberty Evolve offering.

(WATCH VIDEO: Investment -- Liberty's evolve debated)

The offering is credited for being flexible, offering a wide selection choice and offering a different approach to cost.

Liberty Evolve exempts customers from paying for services such as initial advice fees and setup expenses if the investment does not achieve a 15 per cent per year return.