Understanding saving as a driver of economic transformation

__________

OPINION

By Augustus Nuwagaba

Let us have an honest conversation. Many people want economic transformation, but few are willing to start with the most basic foundation, namely, saving. Yet, without a savings culture, transformation remains a slogan, a distant star and not a reality.

Saving has been misconstrued to be a function of income. That those who save are the rich people! This is a fallacy. In fact, saving is more critical for those with limited incomes. The difference between economic progress and stagnation is often not how much you earn, but how you manage what you earn.

Take a common example. A bodaboda rider makes about sh25,000 to sh40,000 a day. Out of this, fuel, food and other expenses quickly take a share. But if he deliberately saves sh5,000 daily, that is sh150,000 a month, sh1.8m a year. That sh1.8m is not little money. It can pay a deposit on a motorcycle, reduce reliance on daily rentals, or act as a buffer during sickness or low business days. That is how saving begins to change a life.

Now think about a market vendor. She buys tomatoes in bulk every morning. On a good day, she makes a profit, but on a bad day, she barely breaks even. Without savings, one bad week wipes out her business. But if she consistently sets aside even sh2,000 per day, over time she builds a small fund. I remember my mother used to have this fund, which she called enzibizi; a term which literally means a savings that will rescue you on a “rainy” day. As we all know, in football, omuzibizi is a No. 4 or a defender: Timothy Awany and Kenneth Semakula (Uganda Cranes); Ramos (former Real Madrid) or Virgil Van Dijk (Liverpool). Coming back to this market vendor, that fund would allow her to restock even after losses, or to expand into onions, green peppers, or fruits. Gradually, her business stabilises and grows.

This is how transformation really happens, not through big announcements, but through small, repeated actions. Saving turns vulnerability into stability, and stability into growth. At the household level, the story is the same. School fees, medical bills, rent, these are not surprises, yet many families only react when the pressure comes.

A household that saves regularly avoids panic. They plan. They make better decisions. They avoid high-interest loans and distress selling of assets. At the community level, we already see working models. SACCOS and village savings groups are helping people pool resources, access credit, and invest in small enterprises.

But we must go further. Saving should not stop at keeping money in a box or a mobile wallet. It should connect to productive investment: Agriculture, small industry, and trade. When savings enter the formal financial system, they become capital. Banks and SACCOS lend this money to entrepreneurs, farmers and businesses. That is how jobs are created.

No country has achieved economic transformation without strong domestic savings. Countries like South Korea and China did not rely on luck, but rather, they built disciplined saving and investment cultures.

In Uganda, we often focus on income first. But income without saving leads to the same cycle: earn, spend, start again. There is no accumulation, no capital formation. Saving is what breaks that cycle. It allows individuals to move from survival to planning, from planning to investment, and from investment to growth.

The writer is the Deputy Governor, Bank Of Uganda