Introduction

Inflation, a term that refers to the general increase in prices and decrease in the purchasing value of money, is a global economic reality. In Nigeria, it reached an all-time high of 26.7% in September 2023. This increase is primarily due to the removal of an old petrol subsidy and the devaluation of the naira against the dollar. As prices rise, Nigerians are faced with economic challenges. However, some strategies can be employed to not only survive but also thrive financially during these times.

Investing in Other Currencies

Investing in other currencies is one way to earn more during inflation. As the value of the naira decreases, having investments in stronger currencies can provide a safety net. This strategy is particularly beneficial for Nigerians who receive remittances from abroad or have access to foreign currencies. It allows them to leverage the strength of these currencies against the weakening Naira, thereby preserving their purchasing power and potentially even increasing their wealth.

Inflation-Protected Securities and High-Growth Equities

Another approach is to invest in inflation-protected securities and high-growth equities. These types of investments are designed to help protect against inflation and can provide returns that outpace inflation. This strategy can be particularly beneficial for Nigerians who have some savings and are looking for ways to grow their wealth. By investing in these securities and equities, they can ensure that their investments grow at a rate that outpaces inflation, thereby preserving their wealth and potentially even increasing it.

Gold Shares ETFs and Mutual Funds

Investing in Gold Shares Exchange Traded Funds (ETFs) and mutual funds is another viable option. Gold often serves as a hedge against inflation, preserving wealth even when prices are rising. Mutual funds offer diversification and professional management, which can be advantageous during inflationary periods. By investing in these funds, Nigerians can ensure that their investments are spread across a variety of assets, thereby reducing risk and potentially increasing returns.

Reducing Costs and Increasing Efficiency

For business owners and entrepreneurs, reducing costs can help maintain profitability during inflation. This could involve reducing import tariffs, addressing security problems, reducing energy costs, improving productivity across all sectors, or reducing the Central Bank of Nigeria’s financing of fiscal deficit. By implementing these strategies, businesses can ensure that they remain profitable even during times of inflation.

High-Interest Savings Account

For everyday Nigerians, keeping cash in a high-interest savings account is another strategy. These accounts offer higher interest rates than regular savings accounts, allowing your money to grow faster over time. By keeping their savings in these accounts, Nigerians can ensure that their money grows at a rate that outpaces inflation, thereby preserving their purchasing power.

Conclusion

In conclusion, while inflation presents challenges, it also offers opportunities for financial growth. By adopting these strategies, everyday Nigerians can navigate through inflation and come out stronger financially. It’s important to remember that while these strategies can help mitigate the effects of inflation, they should be used as part of a comprehensive financial plan that takes into account individual financial goals and risk tolerance.