Inflation is starting to creep up as the election year comes around the corner. At the same time the shilling is rapidly losing ground against the dollar. The shilling is trading at an average 3,500 against the greenback, its lowest level.

The Central Bank has started tightening monetary policy to forestall inflation from exceeding 10% by the end of the year. This has had the effect of signalling commercial banks to heighten their lending rates, making loans more expensive.

The rise in Inflation is a throwback to the 2011 election year when inflation hit the roof and exceeded 30% sending loan rates bonkers. Many Ugandans lost property in the aftermath as loans became harder to pay back.

It is only rational that Ugandans start to prepare for a possible rush in inflation early enough. However, it is important to know that there are winners and losers whenever inflation rises.

Anyone with large, fixed-rate debts such as mortgages benefit from higher inflation, because they will be paying back with devaluated currency. If you are to get a loan now, ensure to get a fixed rate.

Stockholders get some protection from inflation because the same factors that raise the price of goods also raise the values of companies.

Small-business owners also benefit alongside big fixed-rate debts. As prices for products go up, small-business owners find themselves better able to manage fixed-rate debt from investments in equipment and other business necessities.

Other beneficiaries are investors in commodities. Commodity prices track the inflation rate closely. Buying storable commodities such as gold can be a good hedge against inflation.

So as inflation increases, keep the following in mind;

Change Your Priorities; In an economic downturn, our concern needs to switch from luxuries to core needs like food and shelter.

Reduce Your Debt; Though the magic of credit, you can have everything you want right now. The price of instant gratification is that you become a slave to creditors and you put your financial health at risk.

Preserve the Value of Your Money; If we should go into a period of hyper-in­flation, it is very important to preserve the value of your money. Inflation is a very simple economic process, but few people understand how it robs them of their money. Invest in assets that preserve value – in Uganda, prime land has continued to do well. If you have the opportunity, try putting your money in a farm or buy Gold, silver or other good to hold the buying power of money.

Producing Your Own Food; during times of financial misfortune, the supply chain for food may become strained but raising chicken is not only an excellent source of nourishment but a good way of creating value.

Go to Church/Mosque/Synagogue; I don’t recommend going hog wild by building a fortified compound in the backwoods but it is important to remain positive and prayer normally helps. You are likely to laugh at this last recom­mendation if you are currently doing well financially – your first instinct is to pay allegiance to money. Do not. Stories of folks who used to have money and now are broke are common. You must have a good financial discipline to preserve and grow your savings.

Author's Bio: 

Mustapha B. Mugisa is one of those rare people who provide value-based consulting to professionals and corporate entities who demand the very best. He is a prolific speaker, a strategy, risk and anti-fraud expert.

He is a highly qualified professional with over eight certifications and an MBA. He is a Certified Fraud Examiner (CFE), Certified Ethical Hacker (CEH), Certified Hacking Forensic Investigator (CHFI), Certified Information Systems Auditor (CISA) and the Architect of WinningMindset® Leadership and #WinningTheGame® Strategy, a new strategy approach that redefines strategy &execution.