Zimbabwe tops Africa’s most expensive countries list, while Nigeria leads in investments

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Lagos, Nigeria – A recent Price Level Index (PLI) report sheds light on the cost of living across Africa, revealing significant disparities in pricing levels between nations. The PLI measures the relationship between a country’s Purchasing Power Parity (PPP) and its exchange rate against the US dollar, providing a comparative analysis of prices relative to the continent’s average.

According to the findings, Zimbabwe emerges as Africa’s most expensive country, followed by Cape Verde, Djibouti, Seychelles, and South Africa. These nations exceed the regional average in pricing levels, making them costly destinations on the continent. On the opposite end of the spectrum, Sudan, Egypt, Angola, and Ethiopia report the lowest price levels, positioning them as more affordable options.

When it comes to investment spending, Nigeria takes the lead, accounting for 21.3% of Africa’s total gross fixed capital formation expenditure. Trailing behind are Egypt (12.10%), Algeria (10.30%), South Africa (9.30%), and Morocco(6.0%). Together, these five countries represent a significant 75.4% of the continent’s overall investments.

Other notable contributors include Ethiopia (4.02%), Tanzania (3.9%), Kenya (3.5%), Ghana (2.49%), and Ivory Coast(2.46%). However, a stark disparity exists as 35 out of 52 African nations individually account for less than 1% of total investment, collectively contributing just 12.5%.

The data, sourced from the ICP-Africa 2021, is expected to play a pivotal role in regional poverty assessments, revisions of international poverty thresholds, and shaping investment decisions. By offering insights into price levels and investment trends, the report serves as a valuable tool for policymakers and economic stakeholders.

While the dominance of economies like Nigeria and Egypt highlights their role in shaping Africa’s capital formation, the figures underscore the need for broader, more inclusive investment strategies to foster economic equity across the continent.