Akintola Benson Oke
The Lagos State Government is interested in both the personal and official development of the officers of the Lagos State Public Service.
In addition to developing the capacity of officers to discharge their official functions, the administration is also interested in assisting its officers to develop the skills and knowledge necessary to thrive in their personal lives.The importance of financial literacy in today’s economy cannot be over-emphasised. In the first place, ordinary consumers are shouldering more of the financial decisions: Retirement planning is one example of this shift. Past generations depended on pension funds to provide the bulk of their retirement funding. Pension funds are managed by professionals and put the financial burden on the companies or governments that sponsored them. Consumers were not involved in the decision making, typically did not even contribute their own funds, and they were rarely made aware of the funding status or investments held for their pensions. It is different today as employees are now required to take active part in making decisions that affect their pension assets.
Furthermore, there are more complex options confronting consumers of financial services. Consumers are today being asked to choose among various investment and savings products. These products are more sophisticated than in the past, asking consumers to choose among different products options offering varying interest rates and maturities, decisions they are not adequately educated to make. Deciding on complex financial instruments with a large range of options can impact the consumer’s ability to buy a home, finance an education or save for retirement, further complicating financial decision making.
Given the importance of the foregoing, the state government offers training organised by the Public Service Staff Development Centre. By honing and sharpening the skills of officers in the Lagos State public service, the PSSDC continues to carry out its core mandate as envisaged by the Lagos State Government. The state civil service and all civil servants owe a debt gratitude to Governor Akinwunmi Ambode for his dedication to the funding and prioritisation of staff development initiatives.
Investopedia, a respected source for financial matters, described financial literacy as follows: “Financial literacy is the confluence of financial, credit and debt management and the knowledge that is necessary to make financially responsible decisions—decisions that are integral to our everyday lives. Financial literacy includes understanding how a bank account works, what using a credit card really means, and how to avoid debt. In sum, financial literacy impacts the daily decisions an average family makes when trying to balance a budget, buy a home, fund their children’s education, manage their pension assets and ensure an income at retirement.”
Lack of financial literacy, it says, is not a problem only in emerging or developing economies. Consumers in developed or advanced economies also fail to demonstrate a strong grasp of financial principles in order to understand and negotiate the financial landscape, manage financial risks effectively and avoid financial pitfalls. Nations globally, from Korea to Australia, or from Germany to the U.S., are faced with populations who do not understand financial basics.
But, why should this knowledge matter to officers of the Lagos State Public Service and all public servants? Among others, sound financial literacy will help civil servants to enhance their money management skills; assist in the more effective management of debt; and become part of an important national drive to develop consumer skills, knowledge and behaviour in relation to money. Literacy in financial issues will also help them to recognise and avoid fraud; prepare for retirement; seek out help when needed; learn how to cope with dire financial situations; and get educated by experts.
In addition to benefitting the officers, the Lagos State Public Service itself stands to gain from having a financially literate public service. Among others, a financially literate public service adds value to the lives of employees, and empowers them, free of charge; influences productivity levels, by assisting with elimination of financial stresses; and teaches employees that despite our earning levels, we can all learn good money management habits and we can all aspire to a good level of financial security.
Furthermore, financial literacy training will also benefit the community as a whole because financial literacy within a community means community development and lower poverty and crime levels. Indeed, when both adults and children are taught sound financial management skills, then the fabric of families and communities is strengthened. The ripple effect is the enablement of families and communities to ultimately pursue their dreams, and secure a future filled with financial success.
The goals of the training, therefore, are to ensure that the participants become informed and prepared to be effective managers of financial resources, enabling them to achieve long and short-term financial goals and security; become engaged in establishing career goals that will provide adequate income and personal fulfillment; demonstrate an understanding of personal financial planning and money management skills; and understand the personal and societal consequences of financial decisions.
The training will include lessons on planning and goals; career preparation; pending and credit; consumer protection; Income and money management. Others are saving and investing; and risk management.
For those who may still be in doubt, let me mention a number of further reasons why the basic knowledge of financial knowledge matter to officers in the public service. First, longer life spans: We are living longer. This means we need more retirement savings than prior generations. Second, is the changing environment: The financial landscape is very dynamic. Now a global marketplace, there are many more participants in the market and many more factors that can influence it. The quickly changing environment created by technological advances such as electronic trading makes the financial markets even swifter and more volatile. Taken together, these factors can cause conflicting views and difficultly in creating, implementing and following a financial roadmap.
Third, there are now too many choices: Banks, credit unions, brokerage firms, insurance firms, credit card companies, mortgage companies, financial planners and other financial service companies are all vying for assets, creating confusion for the consumer.
I am, therefore, very confident that financial training will benefit the participating public officers, the Lagos State Public Service and the wider community as a whole.
Dr. Benson-Oke, Commissioner, Lagos State Ministry of Establishments, Training and Pensions, delivered this address at a training on Basics of Finance for Officers in the state’s civil service organised by the Public Service Staff Development Centre