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Nigeria Ranked 5th Hardest Hit African Country by Cost of Living Crisis
Nigeria has been ranked as the fifth hardest-hit African country by the global cost-of-living crisis, according to a new report. The mid-2024 cost-of-living index released by Numbeo, a data and research platform, places Nigeria with a score of 31.4. Cameroon tops the list with a score of 37.3, marking it as the country most affected in Africa.
Following Cameroon are Zimbabwe, Mauritius, and South Africa with scores of 37.2, 37.1, and 34.5 respectively. Other countries in the top ten include Ghana (30.9), Kenya (30.2), Botswana (30.1), Morocco (29.5), and Uganda (29.1).
Numbeo collects data from user inputs and authoritative sources such as supermarket websites, taxi companies, government institutions, newspaper articles, and other surveys. This data is entered twice a year.
Nigeria’s cost-of-living challenges began to escalate after the federal government ended the subsidy regime in May last year. This move aimed to reduce government spending and redirect resources to critical sectors of the economy. However, from May 2023 to May 2024, the average price of premium motor spirit (PMS) surged by 211 percent, with the pump price jumping from N187 to an average of N630. This increase occurred without clear plans to support the vulnerable populations most affected by the reforms.
In June, President Bola Tinubu’s government floated the naira to stimulate economic growth, resulting in a 67.8 percent depreciation of the currency. Critics argue that these reforms were implemented too hastily and have led to inflation, reduced purchasing power, and a renewed cost-of-living crisis.
In May 2024, Nigeria recorded its highest inflation rate so far at 33.95 percent, with food prices reaching near three-decade highs. High energy costs and frequent rental hikes have exacerbated the crisis.
If these cost-of-living challenges are not addressed, many Nigerians could be pushed below the poverty line as high prices erode disposable income. The World Bank reports that 87 million Nigerians live below the poverty line, the second-largest poor population globally after India.
The federal government has promised a massive food importation plan to alleviate the crisis, especially regarding food security. This follows the president’s earlier declaration of a ‘State of Emergency’ on food security. Although food inflation remains high at 40.66 percent, the government’s plans may help mitigate the situation.
Minister of Agriculture and Food Security, Abubakar Kyari, recently stated, “Over the past several months, we have all been witnesses to the escalating cost of food items in all parts of the country. There is virtually no food item that has not had its price raised to a level higher than what a good many Nigerians can afford. The government cannot allow this situation to persist. While there are ongoing agricultural initiatives, programmes, and projects under the Federal Ministry of Agriculture and Food Security, and state governments also have theirs, we must respond to the creeping availability crisis.”
