Naira Depreciation Makes Lagos, Abuja Cheapest Global Cities for Expatriates

Lagos and Abuja, Nigeria’s commercial and political hubs, have emerged as the cheapest cities globally for expatriates to reside in, according to the 2024 Mercer cost of living survey.

The significant depreciation of the naira, Nigeria’s currency, has led to a substantial decrease in the cost of living for international assignees in both cities.

The naira’s decline began last year after President Bola Tinubu introduced economic reforms, abandoning the artificial currency peg instituted by the former Central Bank of Nigeria governor, Godwin Emefiele.

The reforms led to a significant devaluation of the naira, making Lagos and Abuja attractive destinations for international workers.

The Mercer survey, which ranked 226 global cities, saw Lagos plummet 173 spots to take the 225th position, while Abuja fell to the 226th position.

Islamabad, Pakistan, was the only city ranked lower than the two Nigerian cities. In contrast, Hong Kong and Singapore emerged as the most expensive cities for international assignees, followed by Western European cities like Zurich, Geneva, and Basel.

The survey attributed the significant decreases in the cost of living rankings to currency devaluations, which have offset the effects of rising inflation in many countries, including Nigeria and Angola. Despite inflation rates exceeding 20% in both countries, the devaluations have made Lagos and Abuja more affordable for international workers.

The report highlights the impact of economic reforms on the cost of living in Nigeria, particularly in Lagos and Abuja. As the naira continues to depreciate, the country’s major cities have become attractive destinations for expatriates, offering a lower cost of living compared to other global cities.

However, the survey also notes that the devaluations have occurred alongside rising inflation rates, which may affect the overall cost of living in the long term. Nigeria’s inflation rate rose to 33.95% in March 2024, driven primarily by food and non-alcoholic beverages, housing, water, electricity, gas, and other fuels.

The report’s findings have implications for international assignees and expatriates considering relocation to Nigeria.

While Lagos and Abuja offer relatively affordable living conditions, the country’s economic volatility and rising inflation rates may require careful consideration.

The 2024 Mercer cost of living survey highlights the significant impact of currency devaluations on the cost of living in Lagos and Abuja, making them the cheapest cities globally for expatriates.

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