Joining Almaty (Kazakhstan) at the bottom is Nigeria’s biggest city, Lagos, which fell 16 places to 132nd place. Although Nigeria has been attracting significant interest and investment in recent years, the fall in global oil prices has driven a collapse in the value of the Nigerian Naira, which pushed down relative pricing, despite strong local inflation.
The relative cost of living in Lagos has more than halved since 2008, which might signal renewed interest from foreign investors, with price levels so low by international standards.
Cheap but not always cheerful As Lagos and Almaty prove, an increasing number of locations are becoming cheaper because of the impact of political or economic disruption. Although the Indian subcontinent remains structurally cheap, instability is becoming an increasingly prominent factor in lowering the relative cost of living of a location.
This means that there is a considerable element of risk in some of the world’s cheapest cities. Karachi, Algiers, Kiev and Lagos have faced well-documented economic, political, security and infrastructural challenges, and there is some correlation between The Economist Intelligence Unit’s cost of living ranking and its sister ranking, the liveability survey. Put simply, cheaper cities tend also to be less liveable.
(Economist Intelligence Unit)