Are rising prices and food shortages leaving you worried? If yes, then you're not alone. Inflation is still on the rise, and food security is a growing concern, not just in Nigeria but worldwide, made worse by wars and climate change. But there are steps you can take to protect yourself and your family. The uncertain economic landscape, the looming spectres of inflation and food crises cast a shadow over the financial security and well-being of individuals and families. Protecting your finances against inflation and food crises has never been more crucial. As food prices rise and access to essential resources becomes increasingly volatile, many are left wondering how to safeguard their finances and pantries against these dual threats. In this article, we delve into the quest for stability amidst turmoil, empowering you to navigate through turbulent times with confidence. Whether you’re a seasoned investor or just starting to build your financial defences, or you just want to be able to still afford the basic needs of your family, this insightful practical guide will show you 5 ways to fight inflation and food crisis to keep you steps ahead of the game. Explore the best strategies to hedge against inflation and food crises. Join us as we navigate the complexities of economic uncertainty and uncover actionable insights to protect yourself and your loved ones in the face of adversity.
What is Inflation?
Inflation refers
to a continuous rise in the prices of goods and services in an economy over
time, leading to a decrease in purchasing power of money. This means that, over
time, the same amount of money will buy you less stuff. Here's an analogy: Imagine you have a basket
of groceries that costs N100 today. With inflation, next year, that same basket
of groceries might cost N1,000 because the prices of individual items have
increased significantly. It is typically measured using the Consumer Price
Index (CPI) or the Producer Price Index (PPI).
Inflation can be caused by various factors, including increased
demand, supply shortages, and government policies like excessive money
printing. Central banks must manage
inflation to maintain economic stability and prevent it from eroding the value
of money too quickly. The Nigerian
central bank needs to manage inflation in Nigeria, exacerbated by the country's poor and hasty government policies.
The Effects of Inflation
Reduced Savings: If inflation exceeds your interest
rate, your savings will lose value over time.
Wage Adjustments: Ideally, wages should increase with
inflation to maintain purchasing power, which in turn leads to increased money
circulation that further worsens inflation. A wage increase in inflation is a
virtuous circle.
Uncertainties: High inflation can be unpredictable
and make it difficult to plan for future expenses.
Levels of Inflation
Low Inflation (around 2–3%): This is generally
considered a healthy level for economic growth.
Moderate Inflation: Anything above 3%
but below 10% can start to cause problems for consumers.
High Inflation (above 10%): This can be very damaging to an economy, leading to uncertainty and hardship.
Inflation reports inform policymakers, investors, businesses, and the
general public about the rate of inflation, its causes, and its potential
impact on economic conditions. They often contain commentary and analysis from
economists and experts, along with forecasts or projections for future
inflation trends. Central banks, such as
the Federal Reserve in the United States, the European Central Bank and the
Central Bank of Nigeria, regularly release inflation reports to communicate their monetary policy decisions and objectives. These
reports play a crucial role in shaping expectations about future economic
conditions and guiding financial market participants in their decision-making
processes.
Historical Trends of Nigeria's Inflation Rate
Nigeria’s
inflation rate has fluctuated significantly over the past 62 years, ranging
from -3.7% in 1967 to 72.8% in 1995.
Nigeria’s
inflation rate has been above the average of emerging market and developing
economies (8.9% in January 2024) and advanced economies (4.7% in January 2024)
for most of the period.
Several factors
have influenced Nigeria's inflation rate, including oil price shocks, exchange
rate movements, fiscal and monetary policies, supply shocks, and structural
bottlenecks.
Nigeria’s
inflation rate has accelerated sharply since 2019, reaching a near 28-year high
of 29.9% in January 2024, driven by food and energy prices, amid the impact of
the COVID-19 pandemic and the Russia-Ukraine war.
The 13 Ways to Fight Inflation and Food Costs
Looking for
measures and ways to hedge Against Inflation and the food crisis?
Here are some
measures to hedge against high inflation:
1. Prioritizing Local and Seasonal Produce:
Nigeria’s
food crisis is mainly caused by its dependence on imported food. And with the
devaluation of the country’s currency [Naira], the food inflation has been made
worse since the inception of the current government. For countries like
Nigeria, sticking with locally produced food can help the poor in hedging the
high food costs. Supporting local farmers and purchasing seasonal produce will
help reduce the environmental impact of food transportation while also ensuring
fresher and more nutritious options. It is no longer news that locally produced foods
are fresher, healthier and more nutritious in most cases. By buying from local
markets or joining community-supported agriculture (CSA) programs, individuals
can contribute to the resilience of regional food systems and reduce their
carbon footprint. However you look at
it, you will see that the benefits of going local with our food are beyond just
having enough and cheaper food.
2. Buy your Foodstuff in Bulk:
Bulk buying is an excellent strategy for
combating inflation and food crises, especially for those on a tight budget. Focus on foods
that have a long shelf life and require minimal preparation, such as rice, beans, canned foods, oils, etc.
- Cost savings:
Purchasing items in bulk often results in lower unit prices
compared to buying smaller quantities. By buying larger quantities of staple
foods like rice, beans, pasta, and grains, individuals can take advantage of
wholesale prices and stretch their food budget further.
- Reduced frequency of shopping
trips: Buying in bulk means fewer trips to
the grocery store, which can save both time and money. By reducing
transportation costs and minimizing impulse purchases, individuals can allocate
more resources towards essential items and better navigate through periods of
inflation.
- Stockpiling non-perishable items:
Non-perishable items such as canned goods, dried beans, and
shelf-stable grains can be safely stored for extended periods, making them
ideal for bulk buying. By stockpiling these items during times of stability,
individuals can build up a reserve of food to rely on during times of inflation
or food scarcity.
- Emergency preparedness: Bulk buying can also serve as a form of emergency preparedness, ensuring that individuals have a sufficient supply of food in case of unexpected events such as natural disasters, job loss, or economic downturns. Having a well-stocked pantry can provide peace of mind and help individuals weather financial challenges more effectively.
- Reducing waste:
Buying in bulk can help reduce packaging waste associated
with individual-sized products, contributing to environmental sustainability.
By purchasing items in larger quantities, individuals can minimize the amount
of packaging material generated and reduce their overall environmental
footprint.
- Sharing with others:
Buying in bulk allows individuals to share resources with
family, friends, or neighbours, fostering a sense of community and solidarity.
By pooling resources and purchasing items together, individuals can access
larger quantities of food at even lower prices, making it easier to support one
another during times of need.
However,
it's essential to be mindful of storage space and expiration dates when buying
in bulk. Also, consider the opportunity cost of your money. This is what I mean by that; consider what you
would have done with the money you are using to stockpile your house with food
with the possible inflation over the period. Ask yourself first if there are investments
that can beat inflation or if putting the money in your business can yield a return higher than the inflation rate within the period the food would have lasted.
It's also crucial to focus on purchasing items that are genuinely needed and
will be used before they expire to avoid waste. Additionally, not all items are
cost-effective to buy in bulk, so it's essential to compare prices and consider
factors such as shelf life and consumption patterns before making bulk
purchases.
3. Grow your Own Food and Raise Livestock:
The
concept of growing your own food and raising livestock revolves around
individuals or communities taking control of their food production process by
cultivating crops and/or raising animals for consumption. This practice can
range from small-scale backyard gardening to larger-scale agricultural
operations, depending on available space, resources, and personal preferences.
Growing your own food:
This involves planting and nurturing edible plants such as
fruits, vegetables, herbs, and grains. Whether it's in a backyard garden, on a
balcony, or in community plots, growing your own food allows you to have a
direct hand in the production process, from seed to harvest. This approach can
provide a sustainable and reliable source of fresh, nutritious produce, while
also promoting environmental stewardship through practices like organic
gardening, water conservation, and biodiversity preservation.
Raising livestock:
Raising livestock involves keeping animals such as chickens,
rabbits, goats, and snails for meat, eggs, milk, or other products. You can
also rare catfish with plastic containers around your house. This can be done
on a small scale, such as keeping a few backyard chickens for eggs, or on a larger
scale with dedicated pastures or barns for multiple animals. Raising livestock
allows individuals to produce their own protein-rich food sources, as well as
potentially valuable by-products like manure for fertilizer. The wastewater
from your fish can also be used to water your garden to enable you to produce all
year round. It also provides opportunities to connect with animals, learn about
animal husbandry, and develop skills in animal care and management.
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Other Benefits:
- Self-sufficiency and food security:
By growing your own food and raising livestock, you become
less reliant on grocery stores and external food sources, which can be
vulnerable to disruptions such as supply chain issues, natural disasters, or
economic instability. This promotes greater self-sufficiency and resilience, as
you have a dependable food supply that is less susceptible to external factors.
Additionally, it can lead to cost savings over time, as you reduce your
dependence on store-bought food and potentially lower your grocery expenses.
- Community and sustainability:
Growing your own food and raising livestock can also foster
community connections and promote sustainability. Participating in community
gardens, farmers' markets or agricultural cooperatives allows individuals to
share resources, knowledge, and experiences with others who share similar
interests in food production and self-reliance. Additionally, practising
sustainable farming and gardening methods, such as composting, crop rotation,
and integrated pest management, contributes to environmental conservation and
the long-term health of ecosystems.
- Cost savings:
Producing your own food can lead to significant cost savings
over time. While there may be initial investments in seeds, equipment, or
infrastructure, the long-term savings on grocery bills can be substantial,
especially if you focus on growing high-yield, nutritious crops and raising
efficient livestock breeds.
- Quality
and freshness: Home-grown fruits, vegetables, and animal products are often
fresher, more flavourful, and higher in nutritional value compared to
store-bought equivalents. By controlling the growing conditions and avoiding
chemical additives, you can ensure that your food is packed with essential
vitamins, minerals, and antioxidants.
- Self-reliance:
Growing your own food and raising livestock fosters
self-reliance and independence, giving you that sense of accomplishment. By
developing gardening skills, animal husbandry knowledge, and food preservation
techniques, you become less dependent on external food sources and gain greater
control over your food supply.
- Connection to nature:
Gardening and animal husbandry provide opportunities to
connect with nature, reduce stress, and promote overall well-being. Spending
time outdoors, tending to plants, and caring for animals can be therapeutic and
fulfilling activities that enhance mental and emotional health.
- Educational opportunities:
Growing your own food and raising livestock offer valuable educational
opportunities for individuals of all ages. From learning about plant biology and
soil health to understanding animal behaviour and nutrition, these activities
provide hands-on learning experiences that promote environmental awareness and
sustainable living.
Overall,
the concept of growing your own food and raising livestock embodies principles
of self-sufficiency, sustainability, and community resilience. By taking an
active role in food production, individuals can reap numerous benefits,
including improved food security, cost savings, environmental stewardship, and
a deeper connection to the natural world.
4. Learn Food Preservation:
Embracing
sustainable practices, adopting sustainable food practices such as reducing
food waste, composting organic waste, and choosing products with eco-friendly
packaging can significantly reduce the environmental footprint of our food
consumption. Wastage can be avoided
through the preservation of foodstuffs. Even Jesus hates wasting food; “When they
were filled, he said unto his disciples, Gather up the fragments that remain,
that nothing be lost”. John 6:12. That was after miraculously feeding 5000 men excluding
women and children with five barley loaves and two small fishes. Food preservation refers to the process of
extending the shelf life of food by slowing down or inhibiting the growth of
microorganisms, enzymes, and other spoilage agents. This practice has been
employed for centuries as a means of ensuring food security, reducing waste,
and maintaining a steady food supply throughout the year, especially during
times of abundance or scarcity.
There are various methods
of food preservation, each suited to different types of food and storage conditions.
Some common methods include:
- Canning:
Canning
involves sealing food in airtight containers and heat processing them to
destroy harmful microorganisms and enzymes. This method is commonly used for
preserving fruits, vegetables, meats, and soups. It can be done using either
water bath canning (for acidic foods) or pressure canning (for low-acid foods).
- Freezing:
Freezing is
one of the simplest and most versatile methods of food preservation. By
lowering the temperature, freezing slows down microbial growth and enzymatic
activity, effectively preserving the quality of foods such as fruits,
vegetables, meats, and prepared meals. Proper packaging is essential to prevent
freezer burn and maintain quality during storage.
- Drying/Dehydrating:
Drying or dehydrating
involves removing moisture from food, which inhibits the growth of bacteria,
moulds, and yeasts. This method can be achieved through air drying, sun drying,
or using specialized dehydrators. Dried foods, such as fruits, vegetables,
herbs, and jerky, are lightweight, shelf-stable, and retain much of their
nutritional value.
- Pickling:
Pickling
involves immersing food in a solution of vinegar, salt, and spices, which
creates an acidic environment that inhibits the growth of spoilage
microorganisms. Commonly pickled foods include cucumbers (to make pickles),
peppers, onions, and various fruits and vegetables. Fermented pickles, such as
sauerkraut and kimchi, rely on naturally occurring beneficial bacteria to
preserve the food.
- Fermentation:
Fermentation
is a natural preservation process that involves the conversion of sugars into
acids, gases, or alcohol by beneficial microorganisms such as bacteria, yeasts,
or moulds. Fermented foods, such as yoghurt, cheese, sourdough bread, kombucha,
and miso, have extended shelf lives and often develop unique flavours and
textures during the fermentation process.
- Smoking:
Smoking is a
traditional method of food preservation that involves exposing food to smoke
from burning wood or other combustible materials. The smoke contains
antimicrobial compounds that help preserve the food and impart a distinctive
smoky flavour. Commonly smoked foods include meats, fish, cheeses, and
vegetables.
- Root Cellaring:
Root
cellaring involves storing fruits and vegetables in a cool, dark, and humid
environment, such as a root cellar or basement. This method utilizes natural
conditions to slow down the ripening process and extend the storage life of
produce such as potatoes, carrots, apples, and onions.
Proverbs 12:27 says "The
slothful man roasteth not that which he took in hunting: but the substance of a
diligent man is precious". Overall, food
preservation techniques play a vital role in ensuring food security, reducing
food waste, and maintaining a diverse and nutritious diet year-round. By
mastering these methods, individuals can enjoy the benefits of fresh, flavourful
foods long after the harvest season has passed.
5. Advocating for policy change:
Engaging in advocacy efforts
aimed at influencing policymakers to implement regulations and policies that
support sustainable agriculture, fair food pricing, and access to nutritious
food for all is crucial. This can involve supporting initiatives such as
subsidies for small-scale farmers, regulations to curb food waste, and measures
to address the root causes of inflation, such as monetary policy and income
inequality.
By focusing on these
strategies, individuals can play a vital role in combating inflation and food
crises while promoting a more sustainable and equitable food system.
6. Budgeting and Meal Planning:
Creating a budget and meal
plan can help individuals allocate their resources more efficiently and avoid
overspending on food. By planning meals around affordable, nutritious
ingredients and buying in bulk when possible, individuals can stretch their
food budget further and minimize the impact of rising prices.
7. Seeking Out Community Resources:
Many communities offer
resources such as food banks, soup kitchens, and community gardens that provide
free or low-cost food assistance to those in need. Individuals experiencing
food insecurity can access these resources to supplement their food supply and
alleviate financial strain during times of inflation.
8. Cooking at Home:
Cooking meals at home from
scratch using basic ingredients is often more affordable than buying
pre-packaged or processed foods. Learning simple cooking techniques and recipes
can empower individuals to create nutritious meals at a fraction of the cost,
thereby stretching their food budget further and reducing the impact of
inflation.
9. Stay Informed:
Keep up with
current events and potential risks in your area that could affect food
availability. You can stay informed and
connected by following The Solutions Hub platforms.
Remember, the key
is to start preparing before a crisis hits, so you’re not caught off guard.
It’s also important to rotate your stock to keep it fresh and to only store
what you and your family will eat to avoid waste.
10. Increase Your Assets:
Building assets provides
individuals with a financial cushion against inflation and economic
uncertainties. For the poor, this could involve saving money regularly,
acquiring valuable skills through education or training, or investing in
income-generating assets such as small businesses, real estate, or stocks. By
increasing assets, individuals can improve their financial resilience and
ability to withstand the impact of rising prices on essential goods and
services.
11. Invest in Inflation-Proof Securities:
Inflation-proof securities
are investments that offer returns that keep pace with or outpace inflation
rates. Examples include Treasury Inflation-Protected Securities (TIPS),
inflation-indexed bonds, and certain commodities like gold and real estate. By
allocating a portion of their investment portfolio to these assets, individuals
can preserve the purchasing power of their savings and offset the erosive
effects of inflation on their wealth.
12. Diversify your Investments:
Diversification involves
spreading investments across different asset classes, sectors, and geographic
regions to reduce risk and enhance returns. For the poor, diversifying
investments can help mitigate the impact of inflation and food crises by
minimizing reliance on any single investment or source of income. This could
involve investing in a mix of stocks, bonds, mutual funds, and other financial
instruments, as well as exploring alternative investments such as peer-to-peer lending
or microfinance initiatives.
13. Adjust your Money Habits:
Adopting prudent money
management habits can also help you navigate inflation and food crises more
effectively. This may include budgeting effectively to prioritize essential
expenses, reducing discretionary spending on non-essential items, seeking out
discounts or sales when purchasing goods, and avoiding high-interest debt that
can exacerbate financial strain. Additionally, cultivating a mindset of
frugality, resourcefulness, and long-term planning can empower individuals to
make informed financial decisions and weather economic challenges more
resiliently. In that regard, we are recommending this book: Mistakes of Esau: 10 Harmful Habits That Ruin People's Destiny. It is a powerful book that can change your life by helping you change the harmful habits that deplete your resources.
By implementing these strategies, individuals, particularly those from low-income backgrounds, can enhance their financial well-being, protect against the negative effects of inflation, and improve their ability to access affordable and nutritious food during times of crisis. These strategies may have different risks and returns depending on your financial goals and risk tolerance. Therefore, you should consult a financial advisor before making any investment decisions.
Conclusion
In conclusion, combating inflation and navigating through a food crisis demands proactive and strategic measures. By implementing the ten practical strategies outlined in this guide, individuals and communities can mitigate the impacts of rising prices and ensure food security. From prioritizing local and seasonal produce to embracing sustainable practices and advocating for policy change, every action counts in safeguarding against the challenges of inflation and food scarcity. By fostering resilience, resourcefulness, and community collaboration, we can pave the way towards a more sustainable and equitable future, where access to affordable and nutritious food is a fundamental right for all.
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