Inflation is the single biggest thief of wealth in Nigeria. I like to think of it as a poltergeist: No one sees it but everyone knows it's there, knocking stuff over and making a mess of everything.

Inflation is an economic term that measures the increase in the prices of goods and services, as well as the decrease in the value of money. Are food prices going up year-on-year? That's inflation at work. Does the value of Naira keep falling in comparison to other currencies? Inflation is at work there, too.

In a tweet on October 28, 2020, Steve Hanke, a professor at John Hopkins University, revealed that his measurement of Nigeria's inflation over the last year stood at 30.37%. His estimate is more than double of government 13.71% figure as of September 2020.

Steve Hanke is a renowned American applied economist. He served as a member of the Council of Economic Advisers between 1981 and 1982 for former American President Ronald Reagan. And he has also worked as a currency reformer in more than 14 countries. Among the sources for his inflation estimate are black-market currency exchanges, the Central Bank of Nigeria, and the U.S. Bureau of Labour Statistics. The Nigerian government, however, has a history of not putting out news that embarrasses it.

Arguments about whose figure is correct will likely split readers along political lines. Although the official figures don't even paint a reassuring picture. The rate of inflation in Nigeria has consistently been higher than the average in sub-Saharan Africa for more than 20 years now. According to the World Bank, Nigeria's inflation between 2000 and 2019 stands at 866.50% compared to the Sub-saharan African (SSA) rate of  189.10%.

Based on data between 2000 and September 2020, to beat inflation in Nigeria, your savings would have to earn you at least 12% cumulative interest every year.

Everybody who earns and spends in Naira is affected by the inflation rate. Salary earners in most organizations have to wait two years or more to receive a bump in their pay. But if the pay rise isn't at least 25% more than the previous cheque, they'd be earning less due to inflation. However, giving a 25% raise to staff every two years is not feasible for most companies.

The worst hit by inflation are savers who have seen the value of their money eroded. Because the rate of Nigerian inflation far outpaces the regular interest rates banks offer. To see how dire the situation is, I tested a 10% compound interest rate against the inflation rate for 20 years and it still didn't catch up.

It should be noted that Nigerian banks don't offer up to 10% interest on savings. For instance, Polaris Bank, one of the country's biggest Tier 2 banks, offers 1.75% interest per annum on savings. Fixed deposit accounts can receive up to 6% per annum, depending on the amount that's being fixed.

Below is a graphical representation of inflation vs different interest rates on ₦100,000 saved for the last 20 years (2000 — September, 2020). The final figures are the time-adjusted values for inflation and these interest rates after 20 years.

Achieving the 12% interest required to beat inflation in Nigeria requires taking on some risk. Typical risk-free investments like treasury bills are offering lesser returns as the day goes by.

On October 27, the stop rate for treasury bills (T-bills) dipped below 1% for all tenors. That means people that invest in T-bills over the next year will invariably earn less than 1%. And it might not get better in the near future.

If you're looking to secure your hard-earned money over the next few years, you'll have to be ingenious. Because if you leave cash lying around, you'll be on the losing end.

After assessing the investment options that are available to small-scale investors, I was able to itemise seven ways you can beat the Nigerian spiraling inflation rate:

  • Fintech investment package
  • Stocks, mutual funds and exchange-traded funds (ETFs)
  • Hold savings in other currencies (USD, Euro, Swiss Francs, etc.)
  • Cryptocurrency
  • Bonds
  • Agro-investment
  • Real estate investment

1. Fintech investment Packages

Several companies offer savings and investment package that you can purchase for as little as ₦10,000. Most of the investment vehicles operate as mutual investment plans that pool small investors together to make one large investment. As earlier stated, the key thing to look out for in investment is an interest rate of 12% or more. Anything below 12% will leave you behind the inflation rate.

The table below shows popular fintech companies and their interest rate on savings and investment:

Interest rates for top fintech companies in Nigeria

S/N Company Annual interest
1. Carbon 11.5% - 15.5%
2. Cowrywise 3 - 3.5%
3. Eyowo 5% - 13%
4. Kolopay Up to 10%
5. OPay 10.4% - 13%
6. Piggyvest 6% - 13%

While Cowrywise offers an average of 3% per annum for investments, there are other investment options available on the platform that will be discussed later.

2. Stocks, Mutual funds, and ETFs

Equity and securities investment can be a safe haven for people looking to escape the scourge of inflation. However, the risks must be accounted for. Stocks, mutual funds, and ETFs are generally high-risk investments and can produce less than desirable outcomes for unskilled investors.

On average, investors should earn between 7% and 10% yearly on the stock market. But skilled investors often perform better.

Thanks to tech startups like Bamboo, Risevest, Chaka, and Trove, you can trade securities domiciled in the U.S., China, and Europe. Recently, I wrote an article on the best investment apps in Nigeria and how they compare. You can also invest in naira and dollar-backed mutual funds on Cowrywise.

3. Hold savings in alternate currencies

The easiest and, perhaps, safest way to keep your money free from inflation is to hold it in a currency that is not as prone to inflation as the Naira. If the CBN decides to abandon its pegged exchange rate system for a floating exchange, the value of the Naira will better reflect the inflation rate.

Currencies like the dollar, euro, pound, and Swiss francs have performed better than the Naira since they are backed by stronger economies.

The most common way to hold foreign currency is to open a domiciliary account in a Nigerian bank. However, the process can be quite tedious, and you will have to pay monthly maintenance charges on the account.

Investment apps that offer access to U.S.-based investments are a cheaper, easier alternative. You can hold U.S. dollars in any of them without extra charges, even if you're not making any active investment. The only challenge is that they may have higher buy rates than banks. Most investment apps use black market rates for transactions.

4. Cryptocurrency

Cryptocurrency is becoming the go-to instrument for many people looking for high-returns in a short timeframe. While the 2017 bubble is still fresh in the memory of many investors, the predictions for crypto, and Bitcoin especially, are still bullish.

See Also: Bitcoin and the future of money in Nigeria

This year, Bitcoin's value has risen by at least 86%. Other popular coins like Ethereum, Ripple, Litecoin, and Binance coin have gained at least 114%, 26%, 26%, and 101%, respectively, since January 1, 2020.

If you are risk-averse, you can invest in a class of cryptocurrencies known as stablecoin. Stablecoins are cryptocurrencies that are pegged to another cryptocurrency, fiat money, or some exchange-traded commodity. They were created to reduce the price volatility that is often associated with other cryptocurrencies.

Currency-pegged stablecoins are a smart way to convert your money to foreign currency. They are typically pegged to the dollar, euro, or Swiss francs, so their volatility is tied to these relatively stable currencies. Examples are TrueUSD (TUSD) and USD Tether (USDT).

You can invest in cryptocurrency from Nigeria using platforms such as Quidax, Buycoins, Luno, Binance, Remitano, or Paxful.

5. Bonds

Bonds are fixed-income instruments that are used to raise funds by private and public entities. They are contracts where the issuer of the bond promises to pay regular, fixed income to the bond buyer. They are a safe means of investment.

The most popular types of bonds are issued by governments, but they do not usually guarantee high interest. Countries under financial stress tend to give out higher rewards on bonds, but such offers should be taken with a pinch of salt. Because it is not uncommon for countries like that to print more money and devalue their currency to be able to meet up with their financial obligations.

Eurobonds are a safer investment. They are bonds that are issued in an international currency so that foreign investors can access them. They do not necessarily have to be issued in Euros. When issued in dollars, they're referred to as Eurodollar bonds; if the issuing currency is the Japanese yen, it's called the Euroyen bond. In March 2020, Nigeria's Eurobond reached a yield of  12.8% per annum. You can purchase Eurobonds on Risevest, Bamboo, I-Invest, and InvestNow.

Private bonds are also available, albeit at higher entry price point. In September,, one of Nigeria's leading logistics companies, issued a $22 million bond to raise financing for expansion plans.

6. Agro-investments

Agriculture has become a lucrative investment sector in recent months. Companies like Crowdyvest, Thrive Agric, and Agropartnership have provided "sachetised" agro-investment packages that can be bought for ₦100,000 or less. The crowdfunded investments are used to fund farms all over the country. When the farms mature, you earn interest on the proceeds. Although the terms of agreement are unique to individual companies, you can expect to earn between 10% and 45% in a calendar year.

You must, however, keep in mind that the sector is not risk-free. Recently, Thrive Agric faced challenges in meeting up with its customer obligations due to the coronavirus pandemic. But the company is steadily charting its way out of dark waters.

See also: Thrive Agric makes organisational changes, appoints Adia Sowho as interim CEO

7. Real Estate

Investing in real estate can be capital intensive, but the returns are often reliable. While making real estate investments might be too expensive for the average investor, there are other ways to be part of the real estate market. One of them is mutual investment plan.

Risevest has a real estate package that promises to pay 10% interest or more. The package pools together investors' funds to invest in U.S. real estate, which typically return between 10% to 13% interest per annum. Each property is divided into 10,000 units, each priced at $10, which is the minimum investment.

Another way to partake in the real estate market is through Real Estate Investment Trusts (REITS). A REIT is a company that owns income-generating real estate like healthcare facilities, offices, malls, and office spaces. These trust are typically tradeable on the stock exchange. REITS are safer than investing in the stock exchange and they often pay higher than average dividends.

According to Nareit, REITS in the U.S. averaged 12.87% a year between 1978 and 2016. Investing in U.S.-based REITS gives you the double advantage of having dollar-backed investment that are inflation-proof and making a profit on them. You can access U.S.-based REITS from Nigeria on Chaka, Trove, and Bamboo.

If you want to invest in Nigerian REITS, the three largest are UPDC Real Estate Investment Trust, Union Homes Real Estate Investment Trust, and the Sky Shelter Fund, in that order. They are tradeable on the Nigerian bourse.


Beating inflation in Nigeria is a numbers' game. Using past data, we have isolated the only requirement: earning at least 12% return on investment every year. While it's not an easy task, it's certainly achievable.

Disclaimer: The opinions expressed in this post are that of the author and do not reflect the views of Ensure to speak with a certified investment expert before making any investment decisions.