Abuja, Lagos – Ranks Least Expensive Cities In Africa for Expatriates

Lagos and Abuja, Nigeria’s bustling commercial and political hubs, have been recognized as the world’s least expensive cities for expatriates in the 2024 Mercer cost of living survey. This surprising ranking is largely due to the significant depreciation of the Naira, Nigeria’s national currency, making life in these cities more affordable for international workers.

The Impact of Naira Depreciation

The primary factor behind this dramatic change is the substantial decline in the Naira’s value. This decline is attributed to a series of economic reforms introduced by President Bola Tinubu, which dismantled the longstanding currency peg set by former Central Bank of Nigeria Governor Godwin Emefiele. These reforms have led to a more flexible exchange rate, causing the Naira to depreciate significantly.

Cost of Living Rankings

As a result, Lagos and Abuja have seen the most substantial drops in the cost of living rankings among 226 global cities from 2023 to 2024. Despite Nigeria’s high inflation rate, currently at 33.95% with food inflation exceeding 40%, the currency depreciation has offset these increases for expatriates. In 2023, Lagos was ranked as the 47th most expensive city globally, while Abuja held the 140th spot. This year, Lagos plummeted 173 places to 225th, and Abuja fell to 226th.

Mercer’s survey explains, “Currency devaluations have been a significant driver of these decreases. The currency-induced falls in the cost of living for international assignees have happened even though inflation in many of these countries has risen.”

Regional and Global Comparisons

The survey also highlights that between March 2023 and March 2024, inflation rates increased by more than 20% in both Nigeria and Angola. Despite these inflationary pressures, the devaluation of local currencies has made cities like Lagos and Abuja more affordable for expatriates.

On the flip side, the most expensive cities for international workers are mainly in Western Europe, with Switzerland housing four of the top-ranking cities. However, Hong Kong and Singapore are at the forefront, ranking first and second, respectively.

Within Africa, Lagos and Abuja stand out as the cheapest cities for expatriates. In stark contrast, Bangui, the capital of the Central African Republic, has risen 12 places to become the 14th most expensive city globally. Djibouti and N’Djamena follow closely, ranking 18th and 21st, respectively. Conversely, Blantyre, Lagos, and Abuja are among the least expensive African cities, ranking 221st, 225th, and 226th globally.

Conclusion

The dramatic depreciation of the Naira and subsequent economic reforms have significantly altered the cost of living landscape for expatriates in Nigeria. While Lagos and Abuja now rank as the least expensive cities globally, this affordability is juxtaposed against the backdrop of high local inflation rates. As the economic situation evolves, it will be interesting to see how these rankings and the living conditions for expatriates in Nigeria continue to change.

Source: Leadership

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