Op-Ed
Financial Realism in 2023
Financial Realism in 2023 by Nchimunya Muvwende
It is the beginning of a new year, a fresh start that allows people to make resolutions and plans that can improve their lives. Many people’s lives have been ruined by a lack of realistic financial planning, which makes plans appear to be mere wishes. In our day, living beyond means has increasingly become a major cause of financial burdens that has affected individuals, marriages, businesses and countries. As you make your plans for this year, what factors should you put into consideration?
Societal pressure
Since we are all products of society, it stands to reason that the people we live with will have the biggest impact on how we choose to live. A lot of people have become indebted as a result of trying to appease society. Society will try to dictate what it views people should have or acquire but not provide the financial means for it. We find people hosting weddings beyond their financial means hence resorting to debt, people living in areas they can’t afford, buying cars which they can’t maintain, eating in expensive places and post on social media, all in a name of showing off that they too can afford.
In making 2023 plans, we should realize that living lives that aim to impress others but are beyond your financial means only serves to mess up your life. You should reflect how societal pressures has broken down marriages, depressed many and ruined the good plans that should have been implemented overtime. It is never a good idea to live above your means, get married on credit, rent a house that takes up practically all of your salary, or simply borrow for showoff. Remember that an expensive wedding is not a key to a successful marriage nor do expensive rentals guarantee good homes. The sad reality is that the lack of being real with ourselves has led people in a loop of debt that is increasing becoming impossible to escape and has in some unfortunate situations led to suicide cases.
Regardless of the pressure society exerts, if it is not supplying the resources, it should not promote notions that would only worsen people’s financial situations. As you plan your activities, realistically consider your financial situation, budget within your means and independently ensure that your future is not compromised by the desire to appease society. Do not buy things you do not need to impress people who may not even value you.
Life adjustment
According to the adage that life is full of ups and downs, there will be periods when things go as planned and when they don’t. Accepting that things have changed and the need for adjustment to a different environment has become a challenge, hence causing financial burdens. People are resisting adapting to changes in their circumstances. A person continues to live in an expensive rented home, drives an expensive car, maintains their children in an expensive school, and otherwise continues to lead a lavish lifestyle even after losing their job or having their business fail. Failure to adjust to circumstances and living a borrowed life only serves to create a stressful life.
To sustain a lifestyle after a reduction in income, borrowing of money becomes an alternative. A lesson can be learnt from chameleons, creatures that change their color to suit their environment and this serves to protect them from certain dangers. You need to understand that downgrading your expenditure when your income changes serves to protect you from further worse financial repercussions arising from maintaining the status quo. Surely, why should you continue accumulating rental arrears when you can shift to a cheaper house, why incur higher fuel expense when you can move to a more fuel efficient vehicle and why should you keep faking your life to appease people who won’t help improve your financial situation? It is time that you realize that life has its own twists and turns that require us to adjust as you figure out a way to come out even stronger.
As you plan for this year, live life according to your means, buy what you can afford and borrow only when necessary. Remember that life is not a race, it is thus important that you are realistic in your planning and execution of them. A borrowed life is both never good and is only a time bomb.
Prioritization
The money that we are able to generate limits the standard of life that we can comfortably afford. In this New Year, we all should evaluate how we have lived in the past, whether we are living a genuine life and what has caused financial constraints. We should prioritise our spending to areas that matter the most. Instead of borrowing for showoff, why don’t you use that car for business? Why not focus on reducing financial pressure in marriage by hosting a wedding that is within your means? Why not shift to a cheaper house, downgrade your car or phone and use that excess money for investment? Why should you continue holding on to debt, borrowing from whatever means you can and end up living a depressed life? In this New Year, let us all focus on what is important, postpone what can be done and prioritise what improves our welfare. Simple rule, if it’s not a necessity, don’t borrow to get it.
Since the New Year promises a fresh start, may this be the year that we are honest with ourselves by objectively assessing our financial condition and developing a budget-friendly strategy as we explore ways to increase our financial security. We should restructure our spending in 2023, only borrow when absolutely necessary, and instead save, invest, and generate wealth.
Sam Tayengwa, CEO of TransUnion Rwanda and Head of Growth Africa Regions (Image: Supplied).
With more than 400 million people between the ages of 15 and 35, Africa has the youngest, fastest-growing, and arguably most digitally savvy population in the world. Given the rapid evolution of technology and research from The TransUnion Trends and Outlook Report for Personal, Commercial, and Life Insurance in 2023 showing that 47% of Generation Z indicate a willingness to purchase life and health insurance online, the potential of this market segment cannot be ignored. Companies therefore need to think smarter when it comes to delivering online insurance solutions while at the same time educating the market on how best to benefit from digital offerings.
By using data more efficiently, insurers can improve customer experiences while managing risks – especially when it comes to people who have no credit profiles. But data means little if insights are locked away inside it. The right data at the right time is essential to make trust possible. Operating in over 30 countries, eight of which are in Africa, we have proven ourselves as a partner who empowers our customers with the information needed to make more accurate predictions when it comes to managing risk, especially amongst the influx of ‘young’ consumers entering the insurance segment for the first time.
Adding further complexity to insurance markets across the continent is the continued cost of living crisis. Consumers are desperately trying to weather the economic crisis and looking at ways to manage inflationary increases, as well as fuel, food prices, and interest rate hikes.
TransUnion research has found that 67% of consumers surveyed in East and Southern Africa indicated that they have reduced their discretionary spending. But even with these cutbacks, at least one in three people are unable to pay any of their bills and loans in full. This makes the insurance value proposition, which many consumers view as a luxury expense, even more difficult to sell.
Market forces
Challenging conditions are creating a profitability challenge for insurers who have been forced to reassess their marketing and underwriting plans while looking internally at how to cut costs. Invariably, this has led to an increase in premiums for existing customers.
Digitalisation across the policy lifecycle and meeting the online expectations of the young population require insurers to rethink their approach to technology. So, while it is essential to adopt the latest innovations to digitalise more traditional insurance practices, it is not just about technology. Insurers must make sure that the human touch points remain in place to build a personal connection with their customer base.
On the flip side of this, new technologies and the use of non-traditional data sources are seeing insurers able to make the policy-writing process more accurate, efficient, and equitable. Now, insurance policies can be more effectively tailored to deliver on individual requirements as opposed to an ‘off-the-shelf’ policy.
Addressing critical needs
However, it is not enough for insurers to embrace advanced technologies and provide more innovative platforms to sell life and health products. It is also essential to transform people’s skills across Africa, especially when it comes to their awareness of insurance and how essential it is.
Part of this entails moving with people as opposed to leaving them behind. Insurance of the future is all about financial inclusion and how no person can afford not to have policies in place. The financial literacy gap when it comes to insurance and the means to buy it must be addressed. Currently, people are not catching up to the technology. This means insurers need to take a step back, review what they are doing, and ensure that they are doing their part to educate the market.
Data identity
All this combines to reflect just how important the consumer is in the relationship. Insurers have realised that it is the end-user who holds all the power in today’s uncertain market. They demand fast, easy, safe, and personalised experiences especially when it comes to essential products and services like insurance.
Consumers expect service providers to know who they are, what their likes and dislikes are, and what their most pressing concerns are all based on the data they provide. Think of this as an individual data identity that translates into a comprehensive data profile of a person – their digital DNA. This data identity influences the opportunities and experiences available to an individual. In this age of data availability, consumers can also access ‘their’ data and decide what to share with whom.
At a top level, the insurance industry faces uncertainty as regulatory bodies discuss and define methods to explore the concepts of fairness and equity in the use of consumer data for insurance transactions. And yet, this presents the insurance sector with a great platform to help drive financial inclusion. Fundamentally, the sustainability of an efficient insurance market is having a comprehensive customer view that will result in an improved insurance experience.
With data identities in place, insurers can access demographics, behaviours, preferences, financial relationships, and even the assets of individuals. All this combines to empower the insurer to develop extensive solutions designed to protect individual and household assets. The result – an improved experience across the insurance lifecycle.
Middle East in Crisis & Conflict: A Primer, Author Taufiq Rahim (Image: Supplied).
As the world grapples with the ongoing crisis in the Middle East, it has opened the door for African leadership on a global stage. The new best-selling book released this month, Middle East in Crisis & Conflict: A Primer, by leading geopolitical strategist Taufiq Rahim, serves as a critical tool for experts and leaders alike, and covers the wide-ranging geopolitical, economic, and social ramifications of this enduring conflict.
For leaders with global aspirations, understanding the dynamics of the Middle East conflict is paramount. It’s not just about the immediate consequences; it’s about comprehending how this crisis reshapes alliances, trade routes, and cooperation among nations. Africa, in particular, stands at a crossroads, as the continent’s leaders must navigate the shifting landscape of international relations.
The Middle East intersects with Africa’s economic future, especially as the Global South consolidates into a formidable bloc. While the immediate focus is on the localized violence in Gaza, there are broader consequences already unfolding. The shifting alliances due to the conflict that is already emerging, will reorient around how African countries will engage the Gulf, the Middle East and even the broader Global South.
In comparing the ripple effects of the Middle East conflict to the Russia-Ukraine war unveils subtle yet impactful consequences. While the latter disrupted grain imports and energy markets, the former exerts its influence in even sharper ways. Particular attention is paid to the rise of extremist activities across Africa. Yet it is the clear gap of leadership in the West amidst this crisis that is strengthening the growing consolidation of BRICS nations, as well as the need for investment and trade routes that connect the Middle East and Africa directly. Political solidarity is giving way to economic solidarity.
In response to these challenges, African leaders must seize the opportunities presented by the vacuum left by Western powers. By providing leadership and resources in humanitarian efforts, Africa can assert its continental power projection. Moreover, this moment offers a unique chance for African businesses to expand into regions traditionally dominated by Western brands.
Taufiq Rahim has a personal background from East Africa, which has enriched his perspective on these issues. His professional journey, spanning investment, technology, and global development, provides valuable insights into the economic impact of Middle East conflicts on Africa, and the broader implications in a shifting world order.. By drawing on his experiences, Rahim illuminates the path forward for African leaders amidst current global events.
In conclusion, the Middle East conflict’s repercussions are already reverberating across continents. Africa must rise to the occasion, leveraging its strengths to navigate these turbulent times and forge a brighter future for all.
About the Book
Since the devastating attacks by Hamas on October 7, 2023, and the subsequent bombardment by Israel of Gaza, there has been an escalating crisis in the Middle East. With an overflow of news, images, and social media, it is hard to make sense of it all. Middle East in Crisis and Conflict: A Primer distills the information, insights, and implications you need to navigate ongoing developments.
Rahim comprehensively but concisely threads together the current moment and the wider context. Drawing on a background working across many of the countries affected and in different spheres–humanitarian, political, and business–he highlights the main facts, stakeholders, and historical moments in one highly readable volume. The Primer is certain to be a leading starting point for experts and observers alike for the events of October 7 and the Palestinian-Israeli conflict overall.
About the Author
Taufiq Rahim is a Strategist, investor, and writer who focuses on the intersection of global geopolitics and transformative technology in a changing world. He first began work in the Middle East in the rural communities of Syria in 2003 and is currently building platforms within the 2040 World nexus. Taufiq Rahim’s deep ties to East Africa and his extensive professional background make him a trusted voice on issues of global significance. Through his work, he continues to advocate for meaningful solutions to complex challenges facing our world today.
Op-Ed
The UK Foreign, Commonwealth & Development Office (FCDO) partners Nigerian Agencies To Address Nigeria’s Flood Risk Communication
The UK Foreign, Commonwealth & Development Office (FCDO) , UK, MET Office, and various Nigerian disaster agencies marks a significant step towards addressing the pressing issue of improving the effectiveness of flood risk communication in Nigeria.
During the high-level meeting held in Abuja today, all disaster management agencies’ Directors and Director General were presented with research findings and recommendations from a 6-month intensive fieldwork project that involved engaging with the most vulnerable communities across the country.
Mr. Donovan Timothy, the Project lead from the UK Meteorological Office (Met Office), expressed optimism about the results of engaging with vulnerable communities. He stressed the importance of proactive disaster communication management strategies and urged stakeholders to work collaboratively to boost resilience and preparedness for potential disasters.
“We are confident that the partners involved in this project will effectively articulate and implement the recommendations provided. We aimed to streamline the process, tailor the recommendations to each agency’s capabilities, and ensure they can be seamlessly implemented across all communication channels outlined in the report. By making the guidelines agency-specific and easy to follow, we believe they will facilitate an efficient and successful execution of the proposed strategies.”
“It is imperative to enhance the communication strategy in Nigeria to protect the vulnerable population from the destructive effects of frequent flooding, which result in significant loss of lives, damage to properties, and mass displacement of people. Addressing the communication gaps is crucial to ensure timely and effective dissemination of information, warnings, and instructions to those at risk. By improving communication channels and strategies, we can increase preparedness, response, and resilience efforts, ultimately minimizing the impact of disasters on our communities. “He added
According to the Director General of the Nigeria Hydrological Services Agency, Engr. Clement Nze, “Flooding is a serious threat to our nation, causing widespread devastation and loss of life. Effective flood risk communication is critical to mobilizing communities to take action and build resilience. We are grateful for FCDO’s support in helping implement key recommendations from a recent report.”
The Steering Committee consisting of representatives of all disaster management agencies, Met Office, and the communication consulting firm, McEnies Global Communication jointly identified opportunities that need to strengthen inter-agency coordination, utilize innovative communication channels, deploy targeted messaging for at-risk groups, and improve monitoring and evaluation of communication efforts.
With these recommendations, FCDO opines that The National Space Research and Development Agency (NASRDA), Nigerian Meteorological Agency (NiMet), Nigeria Hydrological Services Agency (NIHSA), National Water Resources Institute (NIWR), National Emergency Management Agency (NEMA), National Orientation Agency (NOA), and other stakeholders will work together to implement selected recommendations from the report.
Also present at the meeting was Dr. Matthew Adepoju, the Director of the Strategic Space Application Department of The National Space Research Development Agency, (NASRDA) representing the Director General, Dr. Halilu Shaba Ahmad, emphasized the importance of incorporating diverse media platforms in the implementation processes for enhanced efficiency.
Dr. Adepoju highlighted that involving The Broadcasting Organizations of Nigeria (BON) would be beneficial in broadcasting these commendable initiatives effectively. He urged for prompt inclusion of BON in the endeavor to ensure the attainment of significant success and wider recognition. The collaborative effort with media outlets such as BON, as suggested by Dr. Adepoju, aims to maximize the impact and reach of the agency’s endeavors.
The UK FCDO remains steadfast in its dedication to assisting Nigeria in enhancing resilience against climate change and natural calamities. By prioritizing improved flood risk communication, lives can be saved through the empowerment of local communities with essential information necessary for adequate preparation and response during flood incidents.
This collaborative effort not only underscores the importance of proactive measures but also demonstrates a shared commitment to ensuring the safety and well-being of all individuals affected by such disasters. It is through these strategic interventions that the UK FCDO and Nigeria can work together to mitigate the impact of environmental challenges and foster sustainable development for future generations.”
The collaboration is part of the UK government’s wider support for disaster risk reduction in Nigeria, which includes projects focused on flood modeling and forecasting, data collection networks, and disaster risk management planning. By improving inter-agency coordination and adopting best practices in risk communication, this initiative aims to build a more robust and integrated flood early warning system for Nigeria.
