How Should I Invest When Inflation Is Rising in Nigeria?

When inflation is rising, the main goal is not simply to earn a high percentage return; it is to earn a return that is higher than inflation after considering taxes, fees and risk.
For example, if inflation is 15% and your investment earns 10%, you have technically made money, but your purchasing power has fallen.
Asset classes that can help
Asset class
Inflation protection
Risk
My view for a Nigerian investor
Equities/stocks
🟢 High over long term
High
Strong option for long-term wealth
Real estate
🟢 Moderate–High
Medium–High
Good long-term hedge, but requires substantial capital
Dollar assets
🟢 High against naira depreciation
Medium
Useful for currency diversification
Gold/commodities
🟢 Moderate–High
Medium–High
Useful as a diversification hedge
Treasury Bills
🟡 Depends on yield
Low
Good when yield is above inflation
Money-market funds
🟡 Depends on underlying yields
Low–Medium
Useful for liquidity and short-term protection
FGN bonds
🟡 Depends on coupon/yield
Low–Medium
Can work when yields exceed inflation
Bank savings/fixed deposits
🔴 Often weak
Very low
Risk of losing purchasing power when rates lag inflation
Recent Nigerian data illustrates why the distinction matters. July 2026 inflation was reported at 15.43%, while the August 12 Treasury-bill auction had stop rates of 16.30% for 91 days, 16.50% for 182 days and 17.59% for 364 days. In that environment, some short-term government securities could provide a modest positive real return. �
Punch Newspapers +1
1. Stocks — particularly good businesses
Stocks can provide inflation protection because companies can sometimes increase their selling prices as their costs rise. If earnings and dividends grow faster than inflation, shareholders’ purchasing power can grow.
But don’t assume every stock is an inflation hedge. Companies with high debt, weak pricing power or rapidly rising costs can suffer.
A Nigerian market analysis similarly found that equities can act as an inflation hedge when companies have genuine ability to pass higher costs to customers. �
Nairametrics
2. Real estate
Property can help because rents and property values can rise over time as the general price level rises.
However, real estate isn’t automatically a perfect hedge. Location, vacancy, maintenance costs and the type of property matter. Nigerian research has found that the inflation-hedging ability of property varies considerably by property type and location. �
MDPI
You don’t necessarily need millions to get exposure—you can also consider REITs where suitable.
3. Dollar investments
For a Nigerian investor, dollar assets have another important benefit: protection against naira depreciation.
For example, if you hold a dollar asset and the naira loses significant value against the dollar, the naira value of your investment can rise even if the underlying dollar investment itself hasn’t changed much.
But remember: dollar assets aren’t automatically profitable. The underlying investment still matters.
4. Treasury Bills and money-market funds
This is where your recent questions about T-bills and mutual funds become particularly relevant.
You don’t necessarily have to abandon fixed income during inflation.
The key question is:
“Is the effective return I’m earning higher than the current and expected inflation rate?”
For example, if:
Inflation = 15.4%
T-bill yield = 17.5%
your approximate real return before considering taxes/fees is positive.
The real-return calculation is approximately:
Real return = (1 + investment return) ÷ (1 + inflation) − 1
So 17.5% against 15.4% inflation gives roughly 1.8% real return, not 17.5%.
Current Nigerian market commentary indicates that government securities have recently moved back into positive real-return territory as inflation moderated and yields remained elevated. �
Nairametrics
5. Gold and other commodities
Gold can provide diversification during periods of currency weakness, inflation and economic uncertainty. Commodities generally have a stronger connection to the prices of physical goods than cash does.
But I wouldn’t put all your money into gold. It doesn’t produce regular interest or dividends.
What I would NOT do during rising inflation
I wouldn’t automatically move 100% of your money into stocks, property or gold.
A better approach is to combine different assets.
For someone in Nigeria, a simple structure could look like:
Short term / emergency money → Money-market fund / T-bills
Medium term → T-bills + FGN bonds + money-market funds
Long term wealth → Carefully selected Nigerian/international equities + property/REIT exposure
Currency protection → Some dollar-denominated assets
Diversification → Small allocation to gold/commodities where appropriate
The exact percentages should depend heavily on when you need the money.
One important lesson
Don’t ask:
“Which investment pays the highest interest?”
Ask:
“After inflation, taxes, fees and risk, which investment is most likely to increase my purchasing power?”
That distinction is extremely important in Nigeria.