Beating Inflation: Some Mechanisms To Deploy

Here’s welcoming you to a new week. And just like that, we are fast approaching the end of the month.

As we are aware, inflation in Nigeria as of July 2022 was 19.64% (the highest rate since September 2005); an increase from 18.6% in June which indicates that rising prices will continue to impact negatively on income.

According to reports, purchasing power declined by about 10% in the first 7 months of this year. This unfortunately will continue to put pressure on the spending power of the average Nigerian.

With inflation not looking like it will abate anytime soon (in many countries, Nigeria inclusive); there’s a need to continue to deploy defensive mechanisms in guarding one’s finances:

  • Continue to trim discretionary, especially in areas such as entertainment, fashion and travelling. As I mentioned a while ago, this may be the time to reduce the number of cable network subscriptions.
  • Be strategic in household shopping. This may be the best time to explore local substitutes for many foreign products. It may also be wise to reduce visits to the neighbourhood supermarket in favour of shopping at Balogun or Mushin markets.
  • Be decisive about major purchases. Any delay will definitely be more expensive. At times like this, buy now and pay later (BNPL) products or services are attractive options.
  • Maximise yield on investment even though real yield remains negative. Any Naira balance should be in an interest-bearing account no matter how low the yield is. Also, this is the best time to follow up on any unpaid dividend payments.
  • Remain focused on your long-term investment goals even though short-term reality may not be anything to write home about.

In conclusion, times like this call for laser focus on one’s investment goals and continued patience. This is just a bearish season, better days are still ahead.

Our annual Smart Stewards Summit will be held on the 23rd-25th of September 2022, and it promises to be enlightening. With virtual and physical participation options, it’s an opportunity to converge engage, discuss and learn about navigating this financial season, as we anticipate bigger and better days ahead. Please read more about the summit HERE.

We look forward to hosting you.

Here’s wishing you a prosperous September. Till then, do have a fantastic week.


Toyin Oguntuyi