Inflation on Steroids

By Jan 2024 inflation in Nigeria was at 29.9%; food inflation rate was 35.41% on a year-on-year basis.

The good news is "this too shall pass" and normalcy will return whether that means some price stabilisation or reduction occurs as macroeconomic factors are tamed or minimum wage increment, due in April 2024, kicks in or a combination of the two.

So what to do.

It goes without saying that in-between now and "this too shall pass", it is important to device some day to day, medium and long term tactics that can mitigate the inflationary pain.

Listed below are approaches that might help but be agile and change or modify your approach to suit. There is no one size fits all here.

Food, shelter, transport, medicine and the rest.

1. Food

1.i) Grow some of the food you consume - pepper, onion, tomatoes, corn, cassava, yam, pawpaw, and the likes can go a long way to feeding your stomach. In a country where on average 50% to 60% of our income is used on food, this is a no brainer.

1.ii) Negotiate as best you can and buy in bulk or in cartons. In these times the price could change upwards tomorrow.

1.iii) Cook your own food as much as possible.

2. Shelter

2.i) Unless absolutely necessary, this is not the time to move to another accommodation unless you're downsizing to cheaper or your landlord has become extremely unreasonable on rent increase. Moving in this period means higher rent, agency fees & cost to transport furniture. Stay put, negotiate amicably with your landlord, be a responsible tenant by paying rent on time, maintaining the part of the accommodation that's your responsibility, and communicating openly with your landlord to foster a positive relationship.

2.ii) Start planning to own your own home. When "this too shall pass", if you can, try to buy land at an affordable location to your income and build something small to move into. Nothing beats not having to worry about rent, ever.

3) Transport

3.i) Plan journeys to reduce cost.

3.ii) Can you work from home or get reduced office time? Obviously jobs in, for example, hospitality, security, facilities management, and so on requires location presence so perhaps for these jobs working double shifts could mean coming into work less - speak to your boss and see if rotas could be modified without any lost hours; every little helps.

4) Medicine

4.i) We need to watch our health. Mosquito nets, staying hydrated, good personal hygiene and food preparation is a must. Using locally manufactured drugs alternative is a consideration - always speak with your pharmacist or doctor for good affordable alternatives to your ailments where possible.

5. Energy

5.i) Invest in solar power for powering your home. There are a few providers that allow installment payments to ownership. In our electricity challenged environment this is a good investment that pays off quickly.

5.ii) Cooking gas is now a luxury, almost tripling in price within the last three years. To cut down costs: dry pans & pots before cooking; have a lid on frequently; use the small burner; have the burner on low heat; experiment with quicker ways to cook meals.

6) Budgeting, Savings & Investment

6.i) Creating a budget is a necessity. The irony is as you create one it gets decimated almost the next week or month as prices have a upward heart of their own. Irrespective of that, it is still worth having a budget. A budget will keep you clear on what's being spent and put some structure to your spending.

6.ii) Savings are getting eroded during this inflationary time so can you lock some in at higher interest rates, can you invest some? If you are fortunate to have this dilemma speak to a financial expert for advice or do some research. This is the time to maximise earnings where possible.

Refer to our blog The Art Of Saving To Improve Financial Health and Investing For The Future for some tips.

7) Government Welfare Programmes

7.i) The government has some welfare intervention programmes going on or planned to come on stream e.g. selling bulk food at discounts at some locations, sending cash transfers to vulnerable identified citizens, potential youth unemployment benefit to come amongst others. Get to know about these as you and your dependents in your family would want your own share if the criteria is met.

8) Cut Out Spending On Wants

8.i) It goes without saying that frivolous spending is a no-no. Concentrate on "needs" that we can't live without not "wants" that we can live without.

9) Friends & Family In The Diaspora

9.i) Every part of the world is inflationary but some less than others. If you have close friends & family that can help occasionally then contact them for assistance. Remember this is a last optional resort and do consider that they have their own challenges as well.

Final thoughts.

You have got to adapt to the realities on ground, some of us will and some won't so let's look out for one another where we can.

So that we are able to enjoy when the good times return, as it surely will. We will survive as we always have done and always shall do.