Lagos, Nigeria’s commercial hub, and Abuja, the nation’s capital, have been identified as the world’s cheapest cities for international workers.
This revelation comes from the 2024 Mercer Cost of Living Survey, which attributes the affordability to the depreciation of the naira.
Naira Depreciation Lowers Living Costs
The naira’s value began to decline last year after President Bola Tinubu’s economic reforms dismantled the currency peg maintained by former Central Bank Governor Godwin Emefiele.
The reforms aimed to stabilize the economy but resulted in the naira losing significant value.
The Mercer survey noted, “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.”
Significant Decrease in Cost of Living Rankings
Lagos and Abuja have seen the most considerable drops in cost of living rankings among 226 global cities. In 2023, Lagos was ranked the 47th most expensive city, and Abuja was at 140th.
However, the latest data shows Lagos plummeting 173 spots to 225th, with Abuja following closely at 226th.
Despite Nigeria’s high inflation rate, currently at 33.95%, and food inflation soaring above 40%, the depreciation of the naira has made living costs cheaper for expatriates.
Global Comparison
Other cities also noted in the survey include Islamabad, Pakistan, which ranks similarly to Lagos and Abuja.
Conversely, Southeast Asian cities such as Hong Kong and Singapore are the most expensive, holding the first and second positions respectively.
In Africa, while Lagos and Abuja are the cheapest, Bangui, the capital of the Central African Republic, climbed 12 places to 14th globally. Djibouti and N’Djamena also ranked high, at 18th and 21st respectively.
Other African Cities
Among African cities, Johannesburg, Cape Town, Tunis, Lusaka, Gaborone, Windhoek, and Durban also feature in the survey.
Johannesburg, offering economic opportunities and relatively low living costs, ranks 206th. Cape Town, a tourist favorite, ranks 209th, with affordable housing and utilities.
Tunis is noted for its cultural richness and affordability, ranking 210th, while Lusaka, known for low housing and transportation costs, ranks 213th.
Gaborone offers a cost-effective living environment, ranking 215th, and Windhoek, attractive for moderate housing costs, ranks 218th. Durban, with lower costs compared to other major South African cities, ranks 219th. Blantyre, Malawi, ranks 221st due to its low housing and everyday expenses.
Lagos and Abuja’s significant drop in cost of living rankings underscores the impact of currency depreciation on the affordability of these cities for expatriates.
Despite high inflation rates, the lower costs of basic goods and services have positioned these Nigerian cities as the cheapest globally for international workers.
For expatriates seeking affordable living options, Lagos and Abuja now offer cost advantages, a stark contrast to the economic pressures faced by local residents.
