Mid Year Review (Toyin Oguntuyi)

Welcome to another edition of our newsletter. As the 1st half of 2021 wraps up, I am sure that I am not the only one eagerly looking forward to what the 2nd half has to offer.

As we prepare for the remaining 6 months of the year, I will recommend that we all ensure we carry out a mid-year review of their finances. For those who wish to do this exercise, please refer to the article of March 29th 2021 which discussed some steps to be taken.

As those of us in Nigeria plan ahead financially, here are some of the things to bear in mind:

  • Although inflation seems to be tempering, food prices may not come down. This is mainly due to various reasons we are well aware of – the upward trajectory of the exchange rate, insecurity, closed borders as well as our dependence on imports.

The way to mitigate this remains import substitution (where possible) and bulk purchases for those who can afford to do this.

  • Electricity and fuel prices may also increase. Although the Federal Government has suspended any plan to remove fuel subsidy, electricity tariffs are expected to increase effective July 1, 2021.

We should however bear in mind that the continued payment of fuel subsidy is not sustainable and was one of the Government reforms the World Bank highlighted in the recently released country development update. As such, the government may have no choice but to remove subsidy (partially if not fully)

  • In the face of shrinking investment opportunities and yields/returns, many investors will opt for safety over returns. This is expected as wealth building will always remain a long term event rather than an immediate event.
  • Based on the need for safety, many investors will still continue to opt for investments and assets in foreign currency.
  • Despite all of these pressures, there will always remain opportunities to invest locally. It is advisable to always carry out your research as well as remain true to your risk appetite and investment philosophy to avoid “stories that touch”.

Although the vaccination rates on this side of the world are extremely low, please let us play our part by ensuring we get the 2nd dose of the corona virus vaccine if we are qualified to do so.

For those who missed the 1st phase of vaccinations, kindly note that the 2nd phase of national vaccinations is expected to commence next month.

Till next week, continue to stay safe and do have a fruitful week.

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