COPING WITH RISING COST OF LIVING
Kingsley Ndubueze Ayozie suggests way out for millions of Nigerians trapped by rising inflation
Sequel to a recent online publication titled, “Lagos emerges among top10 cities
with highest cost of living in Africa, I felt there is a need for us to holistically look at this
report and think of possible ways that will endear us to stand firm despite the attendants negative implications that these rising cost of living may pose to the ordinary man on the street of Lagos and beyond.
I pondered over the headline and it got to a point that I became worried because of the significant position of Lagos as the commercial nerve center of Nigeria.
My concern currently is hinged on finding an “available remedial action” that can assist the citizenry to come out strong despite the worrisome times. This article is targeted at finding a “possible remedial action and/ or
solution point” that can assist us to triumph economically, financially, socially and otherwise despite the high cost of living among these cities. My search around these 10 cities within the African sub-region revealed
that prices of food stuffs have soared recently with a corresponding rise in hunger
level within their domain. Electricity tariff has suddenly witnessed an upward movement thus posing great threat to the much talked about ease of doing business. There have also been an astronomical increases in the rate of inflation as the cost of education (tuition fees) for our children is not left out on the long list of items that are hurting. The economical value
alongside the purchasing power of their respective local currencies have been devalued greatly
.
Borrowing and lending rates have equally gone up the roof, thus making the needed money
supply within the economy to be limited. The average standard of living is not
encouraging with a corresponding upward movement in poverty level according to this report.
Job losses and unemployment level is also on the run as consumer spending and the
activities within the economy have dwindled drastically . Investments in critical sector
activities have witnessed a downward movement too. Accessing basic healthcare facility
is also creating huge financial burden on the common man in the street of Lagos and elsewhere. Prices of the much needed petroleum
motor spirit (PMS) have equally skyrocketed thus leading to a high cost in transportation fares from one location to another within the metropolis and environs . The hike in
transportation fares has incidentally posed a negative ripple effect on the prices of food
stuffs and basic household items in our economy as food inflation rates have equally soared.. Cost of goods is equally up..
Incidentally the food inflation rate is also not being left out in the long lists of hardship being witnessed as the respective country’s Gross Domestic Product (GDP) is also being negatively affected too.
Lastly, the cost of renting an affordable accommodation is becoming out of the reach of the common man within the 19 mentioned cities in
the African soil .
For us to remain steadfast economically, financially and otherwise in the midst of these
rising cost of living, there exists lots of measures at our doorstep that will see us through
namely: adjusting our different lifestyle in order to suit the current realities of life; embracing bulk purchases in order to enjoy some level of price discounts, massively increasing our income, based through diversification is another positive
measure that is worthy of adoption at this critical point in time in our lives. Others are adopting a
simple life culture; investing for the rainy days either in livestock farming or arable farming is
considered a good idea too; critically looking at ones expenses and beginning to
practice a cost reduction mechanism is not to be neglected. Besides, re-investing our excess
income in real estate business as they appreciate faster and do not depreciate like others
is another acceptable option at our doorstep currently. taking a closer look at our income
and expenditure profile with a view to averting financial crisis in the future is a step in the
right direction (ie practice budgeting) and above all, adoptung an “effective financial
planning mechanism” appears to be the saving grace.
If we all painstakingly and
passionately adopt these stringent measure, it will be rewarding at the end of it all.
Financial planning can be viewed as a short term and /or long term objective that is
tailored towards saving for the future or planning ahead for life after retirement, etc. Another school of thought sees financial planning as a holistic means of factioning
out a detailed and well spelt out plan of action which will either manage an individual or
firm’s finances with a view to achieving financial freedom in the future and also attain to
their financial goals.
In today’s world, financial planning will cover or address on the following measures :
managing and cutting down on ones debt profile; planning a life after retirement period
when we cannot be able to work; taking up an insurance cover that will take care of
eventualities such as accidents, fire outbreaks and the likes when it occurs; setting up an
emergency fund that will assist us to tackle unforseen circumstances when they occur;
critically managing and updating on ones investment portfolio is a critical success factor
too.
Other interpretations of financial planning include : practising the act of budgeting; setting financial goals that will assist us manage our finances; periodically taking a look at our financial indices such as income, expenses, assets, liabilities and equity; and reviewing
regularly your financial plan.
A well implemented financial planning mechanism will attract the following benefits:
enhances the overall financial standing of the ordinary man on the street; assists one to
prioritize your spending through proper adherence to budgetary provisions; combats the financial stress and burden associated with high debt profile situation of the
average man on the street; assists in achieving financial goals laid down and at the same
time keep afloat in today’s rising cost and promotes financial security and protection.
Ayozie, a Chartered Accountant, writes from Lagos
