Naira depreciation makes Lagos, Abuja cheapest global cities for expatriates —Report

Lagos is the commercial hub of Nigeria. The capital city of Nigeria, Abuja, along with Lagos have been ranked as the most affordable places in the world for foreign workers to live.

The recent release of the 2024 Mercer cost of living survey indicates that the lower costs of living for international assignees in both cities can be attributed to the depreciation of the naira.

Shortly after President Bola Tinubu implemented reforms last year and abandoned the long-standing peg put in place by Godwin Emefiele, the former governor of the Central Bank of Nigeria (CBN), which had kept the currency artificially high, the Naira started to decline.

Despite the high rate of inflation, according to the Mercer survey, Lagos and Abuja saw the greatest drops in the cost of living rankings among 226 global cities between 2023 and 2024.

Recall that Nigeria’s current rate of inflation is as high as 33.95 per cent, while food inflation soars above 40 per cent.

Last year, Lagos was the 47th most expensive city to live in, while Abuja was ranked 140th. Islamabad in Pakistan ranked low as Abuja and Lagos in the survey.
According to the latest data, Lagos fell 173 spots to take the 225th position, with Abuja which came behind at 226.

The survey said: “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.

”For example, between March 2023 and March 2024, the inflation rate increased to more than 20% for both Nigeria and Angola.”

Of the 10 most expensive cities for international assignees, half are located in Western Europe, with Switzerland being home to four.

However, it is Southeast Asian cities that lead the list, with Hong Kong and Singapore being in the first and second positions, respectively.

In Africa, Lagos and Abuja also ranked the cheapest, with Bangui, the Central African Republic capital, rising to 12 places and 14th globally.

Djibouti and N’Djamena followed closely, ranking 18th and 21st, respectively.

In the opposite, Blantyre, Lagos, and Abuja are among the least expensive African cities, positioned at 221st, 225th, and 226th globally.

*Johannesburg, South Africa:

Global rank for cost of living: 206. Johannesburg offers abundant economic opportunities paired with a relatively low cost of living, especially in housing and basic services, making it a preferred destination for expats in South Africa. The city’s rank slightly decreased from 205 in 2023 to 206 in 2024.

*Cape Town, South Africa: Despite being a popular tourist hub, Cape Town maintains reasonable living costs for expats, particularly in housing and utilities. The city’s rank improved from 208 in 2023 to 209 in 2024. 8:

*Tunis, Tunisia: Global rank for cost of living: 210. Tunis combines cultural richness with affordability, offering low costs for housing, food, and transportation. The city advanced nine places to rank 210th in 2024.

*Lusaka, Zambia: Global rank for cost of living: 213. Lusaka is renowned for its low living costs, particularly in housing and transportation, making it an attractive option for expats seeking affordability. The city dropped 16 places to rank 213th in 2024.

*Gaborone, Botswana: Global rank for cost of living: 215 Gaborone offers a cost-effective living environment with affordable housing and lower daily essentials costs. The city improved its rank by one place since 2023.

*Windhoek, Namibia: Global rank for cost of living: 218. Windhoek is attractive to cost-conscious expats due to moderate housing costs and relatively low prices for goods and services. The city climbed four places from its previous ranking.

*Durban, South Africa: Global rank for cost of living: 219. Durban boasts a lower cost of living compared to other major South African cities like Johannesburg and Cape Town, especially in housing and groceries. The city’s rank improved from 220 in 2023 to 219 in 2024.

*Blantyre, Malawi:Global rank for cost of living: 221. Blantyre is notable for its low cost of living, particularly in housing and everyday expenses, making it a practical choice for budget-conscious expats. The city dropped 23 places in the rankings, positioning it among the cheapest cities for expatriates.

*Lagos, Nigeria: Global rank for cost of living: 225. In comparison to other cities in Africa, Lagos is the second cheapest city to live in for expatriates due to the lower costs of basic goods and services, influenced by currency depreciation. The city experienced a significant drop of 178 places.

*Abuja, Nigeria: Global rank for cost of living: 226. Abuja’s cost of living has become more affordable due to lower cost increases in housing and utilities compared to other major cities, despite dropping 86 places in the rankings due to currency depreciation.