Inflation for March 2016 was reported as 19.2%. I had initially planned to write a piece about the implications for monetary policy but then I decided that a post on what businesses and individuals should do in such an environment would be more relevant.

Inflation at 19% means that with a given amount of cedis, you will be able to buy 19% less goods and services in a year’s time. The purchasing power of your money is falling at 19% a year. So, what should you do?

1. Spend. Yes, go out and get those sleek new sneakers you have been meaning to get. It will be 19% more expensive in a year’s time. Best to rock it while you can still afford it.

2. Invest in financial assets. Don’t keep your money in your susu box or your savings account. Go out and buy treasury bills or mutual funds with returns of at least 19%. That is how much you need just to maintain the purchasing power of your money.

3. Give your employees a raise. Money is losing real value at a fast rate, so you can give employees a raise now and the real value of the raise will be lost in five years (100/19 = 5.26). However if inflation were to be at 10%, giving your employees a raise will cost you more in real terms. Seeing as salaries are not often renegotiated, this is the time to pay employees more.

4. Don’t seek risky projects. This is not the time to go experimenting. The purchasing power of your money is falling by almost a fifth a year. The last thing you need is a project whose returns you cannot be sure of. Better to choose safe, boring investments.

5. Take a loan. Assuming you were always going to be charged an interest rate of 30% from your bank for a loan, this is a great time to take the loan. The real value of the loan will be falling at 19% a year so repayment will be easier for you than if the inflation rate was at 10%. However, be sure your bank has not significantly increased interest rates due to inflation.

6. Get into a pension plan. I cannot overemphasise the importance of this. A pension plan such as SSNIT is a must in such an inflationary environment. It’s much better to make contributions now and get monthly payments upon retirement than to try to find an investment which will have returns high enough to maintain the purchasing power of your retirement fund.

7. Do something. Whatever you do, don’t sit on your money. That’s a sure way to lose 19% of your purchasing power each year. You may find other suggestions better for you but few would be worse than being passive.