During periods of inflation in Nigeria, preserving the value of excess cash through smart investments is essential. Inflation erodes purchasing power, so holding onto cash might lead to significant losses in real terms. Here are strategies for investing during inflation in Nigeria:
1. Real Estate Investment

Land: Property prices, especially for land, tend to rise with inflation. Land in developing areas or cities like Lagos, Abuja, and Port Harcourt could appreciate in value over time.
Rental Properties: Investing in rental properties can provide a steady cash flow as rental rates often increase during inflation, helping to offset rising costs.

2. Stocks and Equities

Consumer Goods Stocks: Invest in companies that can pass on higher costs to consumers, such as those in essential sectors (e.g., food, beverages, and healthcare). Nigerian blue-chip companies like Dangote Cement, Nestlé Nigeria, and Guinness might be good candidates.
Index Funds: Investing in Nigerian Exchange-traded funds (ETFs) that track the performance of the NSE All-Share Index can provide diversified exposure to the stock market.

3. Treasury Bills and Government Bonds

Treasury Bills (T-Bills): These are risk-free government-backed securities that offer returns higher than savings accounts. While inflation may reduce real returns, T-bills still offer some protection.
Federal Government Bonds: Long-term bonds, such as the FGN Savings Bond, provide fixed interest returns that can be a hedge against inflation if the bond yields are higher than inflation.

4. Commodities

Gold: Gold is traditionally seen as a hedge against inflation. You can invest through gold-backed ETFs or purchase physical gold.
Agricultural Commodities: Nigeria has a strong agricultural sector. Investing in commodities like palm oil, cocoa, and cassava can be profitable, especially as food prices rise with inflation.

5. Foreign Currency and Dollar-Denominated Assets

Foreign Currency Investments: Holding assets or savings in strong foreign currencies like the USD or Euro helps shield you from the devaluation of the Naira.
Eurobonds: Nigerian Eurobonds, issued in foreign currencies, can offer high returns and are less affected by local inflation and currency depreciation.

6. Mutual Funds

Inflation-Protected Mutual Funds: Certain Nigerian mutual funds are structured to protect against inflation, offering diversified portfolios with a focus on assets that perform well in inflationary environments.

7. Cryptocurrency

Cryptocurrencies like Bitcoin and Ethereum can serve as a hedge against inflation due to their decentralized nature and limited supply. However, these are highly volatile and should be approached with caution.

8. Private Equity and Venture Capital

Investing in high-growth Nigerian startups, particularly in sectors like technology, fintech, and agriculture, can provide significant returns, though it comes with higher risk.

Key Considerations

Diversification: Spread your investments across different asset classes to reduce risk.
Research and Professional Advice: Inflationary periods can be tricky, so thorough research or professional financial advice is critical.
Liquidity: Ensure that some of your investments are liquid (easily converted into cash) in case of emergencies.

By carefully choosing assets that outperform during inflation, you can preserve and even grow your wealth in Nigeria’s volatile economic environment.

During periods of inflation, investing in tangible indoor goods that can maintain or increase their value over time, or goods that provide long-term utility, can be a smart move. Here are some tangible indoor goods to consider:

1. Home Appliances

• Energy-Efficient Appliances: Investing in energy-saving refrigerators, air conditioners, washing machines, and microwaves can help reduce long-term energy costs, especially as utility prices rise with inflation.
• Generators or Inverters: In Nigeria, where power supply can be inconsistent, a reliable generator or inverter is essential. It’s a long-term investment that can provide uninterrupted electricity, saving money in the long run.

2. Furniture

• Quality, Durable Furniture: Investing in solid wood furniture (e.g., hardwood) that lasts for years can save you money on replacements. Well-made furniture can even appreciate in value, particularly antique or designer pieces.
• Modular Furniture: Items like foldable tables, multi-purpose chairs, and modular sofas add utility and value in limited space environments.

3. Electronics

• Smart Home Devices: Devices like smart thermostats, smart lighting, and home security systems can increase the efficiency and value of your home. These systems can reduce costs over time by optimizing energy usage.
• Computers and Gadgets: Investing in high-quality laptops, tablets, or desktops for work or learning purposes can be invaluable. Consider brands with a reputation for durability, such as Apple, Dell, or HP.

4. Luxury or Collectible Items

• Art and Collectibles: Pieces of art, sculptures, or high-end decorations can appreciate over time. African art, in particular, may rise in value, given increasing global interest.
• Antique or Vintage Goods: Collectibles like vintage clocks, rare books, and coins can hold or increase their value during inflation. These items can serve as alternative stores of wealth.

5. Fitness Equipment

• Home Gym Equipment: With health awareness increasing, home fitness equipment like treadmills, weights, and exercise bikes can provide long-term benefits. Good-quality equipment can last for years and save on gym membership fees.
• Yoga Mats and Accessories: If you’re into yoga or light workouts, investing in durable, high-quality yoga mats and related accessories is a good choice.

6. Kitchen Equipment

• High-Quality Cookware: Stainless steel or cast-iron pots and pans tend to last longer and distribute heat more evenly. They save you from frequent replacements and provide better cooking results.
• Refrigeration and Storage Units: Food preservation during inflation becomes important. Large freezers or refrigerators can help store perishable items, especially when prices are volatile.
• Blenders and Food Processors: Good-quality food processors or blenders can help you prepare meals more efficiently, saving both time and money in the kitchen.

7. Water Filtration Systems

• Water Purifiers and Filters: Investing in water filtration systems can ensure access to clean water at home, reducing dependency on bottled water or external sources.

8. Home Improvement Materials

• Building Materials: If you’re considering home renovation or expansion, purchasing materials like cement, tiles, and plumbing fixtures can serve as an inflation hedge, as construction costs tend to rise over time.

9. Solar Panels and Batteries

• With rising energy costs, investing in solar panels and backup battery systems can provide long-term savings by reducing electricity bills and ensuring consistent power supply.

10. Health and Wellness Equipment

• Air Purifiers: With pollution and air quality concerns, air purifiers are becoming essential in homes, especially in urban environments.
• Massage Chairs or Therapy Devices: For health and relaxation, investing in home massage chairs or therapy devices like infrared heating pads can provide long-term health benefits.

Key Considerations:

• Durability: Focus on goods that are durable and have a long life span.
• Resale Value: Some goods, such as antiques, art, and collectible items, may appreciate in value, offering a potential for resale at a profit.
• Utility: Choose items that provide everyday utility and reduce other costs (e.g., energy-efficient appliances or solar panels).

Investing in these goods can help you maintain purchasing power while adding to your home’s comfort, efficiency, and value.