The economic metric of purchasing power has revealed a stark reality for many African cities, where residents struggle to afford basic necessities due to low income levels. According to a report by Numbeo, Lagos, Nigeria, tops the list of African cities with the lowest purchasing power in 2025, followed closely by Addis Ababa, Ethiopia, Accra, Ghana, Kampala, Uganda, and Kigali, Rwanda.

The purchasing power index, which measures the relative purchasing power in a city based on the average net pay, paints a dire picture of the economic situation in these cities. A domestic purchasing power of 40, for instance, means that residents with an average salary can afford, on average, 60% less goods and services compared to residents of New York City with an average salary.

The consequences of low purchasing power are far-reaching, affecting not only individuals but also local businesses and governments. Residents in these cities often have to reduce their spending on essential items, compromising their health and overall quality of life. Small businesses struggle to stay afloat, entrepreneurship declines, and economic development slows, leading to a vicious cycle of financial instability.

Households with restricted purchasing power are unable to save or invest, making wealth-building almost impossible. Many families find themselves in debt, unable to afford proper education for their children, adequate healthcare, or emergency bills. This exacerbates economic inequality and weakens long-term financial stability.

Furthermore, governments in these cities suffer from decreased tax revenues, as fewer wages and expenditures result in lower collections from value-added tax (VAT), income tax, and corporation tax. This limits their ability to invest in public services, infrastructure, and social welfare programs, causing people's living circumstances to deteriorate even further.

African cities with low purchasing power also struggle to function as commercial or industrial hubs. Local industries remain underdeveloped, and reliance on imports grows, reducing regional economic integration and making these cities less appealing to investors.

In essence, poor buying power in African cities causes an economic downturn, making it harder for individuals, businesses, and governments to grow. The ranking of the top 5 African cities with the lowest purchasing power in 2025 serves as a wake-up call for policymakers and stakeholders to address the underlying issues and work towards creating a more sustainable economic environment.

Here is the complete list of the top 5 African cities with the lowest purchasing power in 2025, according to Numbeo's index:

Rank 1: Lagos, Nigeria - Local purchasing power index: 10.6, Global rank: 1st

Rank 2: Addis Ababa, Ethiopia - Local purchasing power index: 11.7, Global rank: 2nd

Rank 3: Accra, Ghana - Local purchasing power index: 15.2, Global rank: 4th

Rank 4: Kampala, Uganda - Local purchasing power index: 17.1, Global rank: 6th

Rank 5: Kigali, Rwanda - Local purchasing power index: 18.5, Global rank: 7th

Source: Numbeo