inflation
Inflation is the rate at which prices rise, which means the same naira buys you less than it did last year.
In plain English
Inflation is not a headline. It is the reason the bread that cost ₦800 last year costs ₦1,300 today, and the reason your salary can rise while your life gets harder.
Think of money as a container. Inflation makes a small hole in the bottom of it. Nobody takes anything from you, and yet there is less inside every month. If prices rise 25 percent and your money is sitting in an account paying 4 percent, you have lost roughly a fifth of what you had. The number in your app went up. What that number can buy went down.
This is why keeping large amounts of cash under a mattress or in a current account is not safe at all. It only feels safe, because the number never falls.
The honest response is not panic. It is putting your money somewhere it has a fighting chance of growing faster than prices do, and accepting that doing nothing is itself a decision with a cost attached.
In 2020 a bag of rice cost about ₦18,000. If you had kept ₦18,000 in a current account and come back in 2024, you would still have ₦18,000 and you would no longer be able to afford the bag. The money did not shrink. Its power did.
Questions people ask
What is Nigeria's inflation rate?
It moves, so check the National Bureau of Statistics rather than trusting an old figure. What matters is not the exact number but whether your savings are growing faster than it.
How do I protect my money from inflation?
Hold only what you need in cash, and put the rest into things that can grow faster than prices, such as treasury bills, funds or equities. Nothing removes the risk entirely, but doing nothing guarantees the loss.
Is some inflation normal?
Yes. Most economies aim for a small, steady rise in prices. The danger is when it runs fast and unpredictably, which makes planning almost impossible for ordinary people.
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