Lagos now ranked among world’s cheapest cities in USD terms

Lagos, Nigeria

The Economist Intelligence Unit (EIU) recently released its Worldwide Cost of Living 2017 survey, a ranking of the most expensive cities.

To compile the list, the EIU collected prices for over 160 consumer items in each city. The prices were then converted to US dollars and weighted to achieve comparative indices.

The 10 most expensive cities in the world. Source: EIU

Singapore remains the most expensive city in the world, with Hong Kong and Zurich in second and third places respectively. No African cities are among the world’s 10 most expensive, although two – Lagos and Algiers – feature in the bottom 10.

Nigeria’s biggest city Lagos is ranked as the world’s second-cheapest. It fell 16 places to 132nd this year, as the value of the Nigerian naira collapsed, which, despite strong domestic inflation, pushed down the prices of goods in US dollar terms.

Nigeria has been experiencing significant economic headwinds due to the fall in the price of oil, which accounts for the vast majority of the country’s foreign earnings. The economy was in recession during 2016, with GDP shrinking by an estimated 1.5%.

The relative cost of living in Lagos has more than halved since 2008, which the EIU suggests could signal renewed interest from foreign investors, with price levels so low by international standards.

The 10 cheapest cities in the world. Source: EIU

Last year the Zambian capital, Lusaka, was the cheapest city in the world, but has subsequently moved up 11 places due to the stabilisation of the kwacha and rising inflation. The country’s economic performance has recently been impacted by drought and related water and power outages, as well as a low copper price.