NAVIGATING THE CAPITAL MARKET: THE INVESTOR'S DILEMMA
Guy Czartoryski
23 Jun 2021 · Research
How much should our Naira investments return?
When we talk with investors two concerns frequently come up. One is inflation: “How can our investments beat inflation?”. The other is Naira devaluation, not so much because of its direct impact (devaluations do not directly impact Naira investments) but because of the business disruption that devaluations cause.
In this report we treat these two problems as essentially the same thing. It is the difference between US dollar inflation and Naira inflation that drives periodic Naira devaluations. Therefore, the first job of a Naira investment is not to beat inflation as such, but to beat the difference between US dollar inflation and Naira inflation.
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