By Caroline Kanshabe
A low purchasing power has far-reaching ramifications. Numerous African countries face challenges associated with low purchasing power, reflecting various economic and social challenges.
Given the relevance of the purchasing power of a region, the purchasing power index must be made available to be better suited to fix the issue. Fortunately, there are research bodies responsible for such data collation, and Numbeo is one of them.
The Purchasing Power Index (PPI) is an important economic indicator that gives useful information about the relative worth of currencies and the cost of living in various nations.
According to Numbeo, one of the world’s most profound data and research platforms, the index for local purchasing power is based on the average net salary of any given region.
A domestic purchasing power of 40 means that residents with an average salary can afford, on average, 60% fewer goods and services compared to residents of New York City with an average salary.
The local purchasing power index, along with four other indexes, is used by Numbeo to calculate the overall cost of living in regions across the globe. Additional indicators include the rent index, the cost of living plus rent index, the food index, and the restaurant pricing index; a weighted average of these scores yields the total cost of living index.
Top 10 African cities with the lowest purchasing power
| Rank | City | Country | Local purchasing power index |
|---|---|---|---|
| 1. | Douala | Cameroon | 5.7 |
| 2. | Abidjan | Ivory Coast | 6.2 |
| 3. | Addis Ababa | Ethiopia | 8.2 |
| 4. | Lagos | Nigeria | 10.1 |
| 5. | Accra | Ghana | 11.4 |
| 6. | Kampala | Uganda | 13.4 |
| 7. | Alexandria | Egypt | 14.3 |
| 8. | Cairo | Egypt | 14.9 |
| 9. | Dakar | Senegal | 16.3 |
| 10. | Giza | Egypt | 17.3 |
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