Why Abuja and Lagos Are Now the Cheapest Cities for Foreign Workers
Abuja, Nigeria’s capital, and Lagos, its economic hub, have been ranked as the cheapest cities for foreign workers to live in, according to a recent Mercer’s annual Cost of Living City Ranking. The study, which evaluates 226 cities worldwide, provides critical insights for global mobility operations and international assignees.
Mercer’s report reveals that the most expensive city to live in globally is Hong Kong, followed by Singapore and Zurich, in north-central Switzerland. On the African continent, Bangui, the capital of the Central African Republic; Djibouti, a country located in the Horn of Africa; and N’Djamena, the capital city of Chad, are the costliest cities, with Bangui climbing twelve places to rank 14th overall.
In stark contrast, Lagos and Abuja have plummeted to the bottom of the list, ranking 225th and 226th respectively.
“In Africa, cities that placed highest in the global Cost of Living City Ranking are Bangui (14, up 12 places), Djibouti (18), and N’Djamena (21). The least expensive cities in the region include Blantyre (221), Lagos (225, down 178 places), and Abuja (226).”
Why Abuja and Lagos Are World’s Cheapest Cities To Live In
Currency devaluation has been cited as the major reason why Abuja and Lagos have become the cheapest cities to live in for foreign workers. In June of last year, the Central Bank of Nigeria (CBN) announced the collapse of multiple exchange rates in the country. While the naira was trading around 464/$ at the official market before the policy was announced, Nigeria’s currency has depreciated by over 200 percent and traded at 1483.31/$ on Friday, June 21.
While this depreciation has affected businesses and caused the price of goods and services to skyrocket in the country, making it unaffordable for average Nigerians, the policy has, in part, benefited foreign workers living in what are arguably Nigeria’s two most important cities, Lagos and Abuja.
The low cost of living in Abuja and Lagos is despite Nigeria witnessing one of its worst inflation rates in nearly three decades, with food inflation soaring as high as 40.66 percent.
The report said that “in Islamabad, Lagos, and Abuja, the demonstrably lower costs of living for international assignees have, in part, been driven by currency depreciations,” adding that the “currency-induced falls in the cost of living for international assignees have happened even though inflation in many of these countries has risen.”
While the affordability of a place could play a role in a foreign worker living a good life, Mercer’s report stated that “a location’s attractiveness extends far beyond mere cost considerations.”
“Quality of life, safety and security, and the presence of robust infrastructure and seamless connectivity have become key determinants of a location’s allure,” it said.
