Some of the major cities in Africa are seeing a decline in purchasing power halfway through 2025, while other cities are seeing an increase in purchasing power, according to Numbeo’s “Purchasing Power Index” report, which measures relative purchasing power based on average net salaries.
Losing purchasing power means residents are unable to afford basic products and services. There are consequences, experts warn. With lower purchasing power, people may face restrictions on purchases, fewer businesses may expand, and the quality of life may deteriorate.
The Five Cities in Africa Losing Purchasing Power
- Lagos, Nigeria
- Abidjan, Ivory Coast,
- Addis Ababa, Ethiopia
- Accra, Ghana
- Alexandria, Egypt
Why This Matters
Purchasing power reflects the individuals’ ability to afford goods and services. As News Central reports, stronger purchasing power contributes to poverty reduction and a better quality of life. When wages are higher than the cost of living, for example, people have better access to essential services such as housing, healthcare, education, and nutrition, which improves overall well-being and economic stability.
Low purchasing power is
often associated with weaker economies, but that’s not always the case. In most cases, purchasing power is also linked to the gross domestic product, economic diversification, and income distribution.Many African nations rely heavily on the export of raw materials. However, factors such as price volatility, limited job creation, and income inequality prevent the benefits from trickling down into the broader population.
In Nigeria, the naira’s decline has reportedly made everyday essentials more expensive. Meanwhile in Ghana, the inflation crisis is straining household budgets.
According to Numbeo’s Purchasing Power Index,
the African nations with the lowest purchasing power so far in 2025 are as follows:- Cameroon
- Nigeria
- Ivory Coast
- Ethiopia
- Madagascar
- Uganda
- Ghana
- Rwanda
- Egypt
- Tanzania
In Cameroon and Nigeria, people are struggling with high inflation and currency instability. People in the Ivory Coast and Ethiopia are facing structural economic challenges, including a heavy reliance on primary commodities and limited industrialization, according to News Central Africa.
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