The Cost of Living in Africa 2024
2024-01-01
In the ever-shifting landscape of global economies, the latest Worldwide Cost of Living survey conducted by Xpatulator in January 2024 has cast a revealing light on the challenges faced by African cities. As the continent grapples with the aftermath of the pandemic, a myriad of factors continues to contribute to the relatively high cost of living for Expatriate’s across the continent. Despite some respite from the peak of inflation, economists caution that formidable challenges persist, with the spectre of inflation risks looming large on the horizon.
Monrovia in Liberia, has ascended to claim the title of the most expensive city for expatriates in Africa for the first quarter of 2024. A remarkable surge of 155 places catapulted Monrovia to the 33rd most expensive location globally. This unprecedented ascent is attributed to a complex interplay of factors, with currency appreciation against the US Dollar and demand constraints taking centre stage. Liberia's import-reliant economy, where prices of almost all imported items are quoted in US dollars, exposes expatriates to the brunt of inflated costs.
With an overall cost of living index of 93, Monrovia, though claiming the crown in Africa, remains a more cost-effective destination compared to the familiar financial hub of New York City, which boasts a cost of living index of 100. Meanwhile, Libreville in Gabon follows closely with a cost-of-living index of 87, and Addis Ababa in Ethiopia secures the third spot with a cost of living index of 84.
Nigeria, an economic powerhouse in the region, experiences a sharp decline in global cost of living rankings for the first quarter of 2024, particularly notable in cities like Abuja. The cost of living index for Abuja plummeted from 88.5 in October 2023 to 68.7 as of January 2024. The root of this decline can be traced to the volatility of the Nigerian naira, unleashed by the government's decision to ease currency controls in June. This move sent shockwaves through the economy, leading to foreign exchange reserves hitting a six-year low by December. The naira itself ranked as the third worst-performing global currency in 2023. A backlog of unsettled forwards, undelivered promises of dollar inflows, and a two-decade peak in inflation exacerbate the already precarious situation.
While Monrovia makes headlines for its remarkable ascent, other cities in Africa are also making waves in the global cost of living rankings. Freetown, for instance, has risen to become the 10th most expensive city in Africa, while Brazzaville secures the 13th position. These shifts underscore the dynamic and unpredictable nature of economic forces at play, shaping the international cost of living landscape in Africa for 2024.
In conclusion, the Xpatulator survey offers a comprehensive snapshot of the economic complexities faced by African cities in the wake of the pandemic. Monrovia's unprecedented rise, coupled with Nigeria's struggles, highlights the intricate dance of currency fluctuations, inflationary pressures, and demand-side constraints. As the world watches these economic narratives unfold, the cost of living becomes not just a statistic but a testament to the resilience and adaptability of nations in the face of global challenges.