 Yeah, I'm the executive director Kenya Institute for Public Policy Research and Analysis Which is a government think tank under the under the National Treasury and Economic Planning and we undertake various activities in Promoting and strengthening the public policy making process So for today, we are going to demonstrate One of the mandate that we have and that is undertaking Research that is aimed at providing Policy policy advice to the government so I'll start with a Yeah, this is this is how I'm going to take you through I'll introduce just to see for us the savings Levels for the the country I'll also Highlight some of the interventions that are ongoing and that have been there Also discuss some of the channels and the motivations for savings Relationship between savings and shocks and then look at the empirical analysis that we've done on savings behavior and of course conclude with policy implications so just to start with When we think about the levels of of savings and investment you'll notice that Before the 1990s when we were going through Structure adjustment programs. We had not even liberalized the the market in terms of the financial sector in terms of the Foreign exchange And they also the the capital markets You see like the two of them were almost moving Closely, but then after that in a liberalized the world What you notice is that the gap between the savings and investment Has a has persisted It has remained also Yeah, they are for for for quite a while and this in itself has implications as far as the financing development is Concerned so and this is what has actually motivated the the kind of study that we are trying to do to ask ourselves How then do you? Grow domestic savings Such that you are able to mobilize adequately to finance the investments Of course over the time the government has actually taken up various initiatives To promote the savings culture in the country And we have seen for example if you look at the long-term development agenda their expectations set up by the government in terms of growth in in in savings and Yes, we want to be at a point where our savings are growing by 29% But we are not yet there. We actually as the as the chair has said we are still below 10 percent at the moment so The efforts that have been done is for example to establish a Channels to facilitate savings whether long-term savings like the National Social Security Fund Which is there for? Long-term savings the commercial banks the capital markets reforms have gone through Over time and I'm happy that we have the chair as part of the capital markets And of course, there are other platforms including and right now there is quite a lot of emphasis on those in the informal sector forming cooperatives so that they can they can one on one hand a great Their services or their products, but on the other hand also to mobilize the resources and also to use that platform to have different access to Access to financial facilities including micro finance a mic micro micro Insurance kind of products The liberalization of the market has seen the interest rate policy change But we know that there has been a quite a Back-and-forth at some point in early 2000s when we heard the donor bill in terms of the interest rate a copying it Of course, it didn't say it didn't it didn't happen, but recently in the 20 1617 up to about 2019-20-20 We've seen a period where the interest rate a copying has happened and these are almost reversing the gains that we had done and it has implication it had implications on how The the pricing for for the financial assets are concerned and then of course we So that's that's taking care of the kind of private sector Savings, but of course when you think about the the government savings. There has been this commitment for financial sustainability Having a fiscal consolidation path, but of course when when we get into some of the shocks like the 20-20 shock then we find that a fiscal Pressures making it impossible Without fiscal buffers actually to sustain the momentum as far as fiscal consolidation is concerned and then finally I can also talk about the very recent Attempts by the government to Come up with what we are calling the financial inclusion fund and with this fund What the government is looking at is not only to have those at the bottom of the pyramid accessing loans, but at the same time also Saving and creating that culture of saving. So if you look at the saving structure of a time through the channels, you'll notice that data from the fin access from 2006 to 2019 we have not included the 2021 you'll notice that there has been a change in terms of shifts in terms of the channels that are being used for Saving for example, you find with the FinTech, of course, that is now taking up a quite a quite a higher Proportion, but we have not forgotten the traditions of our banking sector and of course circles are also coming in heavily and Also the groups or the What do you call them? They're like informal informal groupings, Chamas and you know They also are still taking a priority in terms of the channels through which savings happen In terms of motivation for saving you will notice that We always assume that you know you are saving because you want to invest but from this You'll notice that it's not always that savings are happening because you want to invest They are they're happening because you have a target either to educate your children So you want to keep a savings today because you have a target So they are targeted savings that are happening But at the same time you are also saving for other ordinary needs of the of the household But in terms of saving for investment Yes, it is there, but we can see that there's quite a lot of them smoothening consumption of a time at the household level If you look at Shocks that have a hit the country over time They have implications for example on inflation which has Of course implications on the on the real on the real savings or also the real interest rates that would attract savings and Anytime we have had these shocks you'll notice that we go into a period where The saving level actually comes down. We are hit again. And then the saving level actually Tend to slow down, which means that we need to see how we can smoothen The the the savings behavior across the various shocks that That the country goes through and this has a you can see that it is very clearly rated also in terms of the The returns that you get from the savings Over time you can also see a Change as far as the population structure is concerned between 1989 Sensors and what we have in 2019 sensors You'll notice that the age group of 0 to 17 and 18 to 34 18 to 34 is growing up of course a 0 to 17 it means that they have already mature they have gotten into the labor market and Therefore this is causing an increase as far as the 18 to 34 The youth are concerned and therefore the life cycle aspect We may not necessarily say that it's not it's not Something to take into consideration. We need to take into consideration and you can see the figures here that Something is happening as the as the Demographic dynamics are changing a fiscal Deficit have already talked about it. I don't need to go back to it, but I have to say that How we went about in the analysis we use the life cycle Hypothesis to do this work and I don't want to go into that theory But I want to tell you what is it that we were able to get out of that analysis and one of the things we found is that As I've indicated the fiscal aspect is very crucial and that any time we find that the fiscal Deficit is is increasing of course a public savings. They are for Not necessarily there then you would reduce you tend to reduce the The savings even for the privacy the savings are going down Because of those pressures shocks that would come from the terms of trade He are using the terms of trade. Sorry. I have jumped Yeah, I've gone back. Yeah in terms of terms of trade here again, there is Yeah, again, you find that there is a negative relationship both in the short term and in the long term in freshen also Which has implications as far as the real savings are concerned and which is a An implication as far as macroeconomic stability is concerned The income levels we use the per capita income. You see that as per capita income rises Then there is a tendency to increase the private savings and in terms of deposit rate The expectation is that as deposit rate Sorry, we found a negative relationship actually the expectation was that we should see a positive Relationship and this was happening both in the in the long run and also in in the short run which means that we need to think about the aspect of The substitution effect as well as the income effect and how the net effect is is is a Coming into the total amount of savings that we're generating and of course we have seen as far as the age dependency is concerned you notice that As we think about the population Structure we need actually to in the long run to see a situation where We are able to enhance the The savings art at the art at the youthful stage. So the same the same thing we got with the national the national Savings, but only in some not in all variables. Do we see a Significant relationship, but what I wanted to bring here is the aspect of financial development The financial development tended to give us a negative Relationship especially in the short run and we need to think about whether the financial development that is happening at the moment is providing an environment where we have adequate instruments adequate channels where savings can be enhanced and So to come to policy implications What we are saying is that fiscal sustainability is is always So yeah, I've run into two problems. I don't know what has happened. Yes Thank God I have my Yes, I Don't what has happened your device ran into problems. Okay as it runs into problems I don't want to run into problems myself. So one of the things is a fiscal sustainability We are saying that we need to actually Yeah, yeah, yeah, yeah fiscal sustainability we need to we need to guard to guard it because Anytime we have fiscal deficit and maybe you have like now increases as far as the tax rates are concerned Or even other levels that that would actually bring down the amount of the income that Households have for for saving this may have implications as far as the savings rate is concerned The second thing is about a price stability. I know there are situations where we have Drought situations and we find ourselves in Circumstances where prices have gone up especially prices for food and it means that when you are trying to reallocate your resources between a Food and and saving that aspect can have implications on saving so and ensuring that price stability is maintained in the country has has a Automatically an effect on the household and the allocation of resources that they have of course quality and inclusive economic growth matters a lot and what you find for example in Kenya with the current government They have had a focus they are having a focus on what you're calling the bottom-up economic agenda focusing on agriculture where majority are employed enhancing agricultural productivity becomes a Major issue and secondly is also on micro and small enterprises. This is where the youth are and also this is where Decent jobs need to be generated so that you can see about 14 million of Kenyans Who form about 85 percent of? Of the labor force each year if they are given an opportunity With the decent jobs then they can actually come in to enhance the the the savings in the country and of course There's one element that we have always forgotten And that is the the quantification of the non-cash savings in a country like Kenya where you have a significant even subsistence a Farming you will find that a lot of them don't actually do cash Saving what they do is they will buy today a goat they'll buy tomorrow a chicken and Those becomes actually part of their saving and anytime they run into issues These are the things that they cash in which means that it's a saving in itself but it doesn't necessarily get captured in the in the process of Yes getting information on the amount of amount of savings that are there and of course finally is As I've indicated the quality of jobs to absorb the Youth category because if the youth actually introduced to the culture of saving then that would help a lot in terms of a promoting Private savings and I've said for you two minutes. I thank you very much you