It is an amazing fact to know that one of Africa’s commercial and financial centres is Lagos. And in Nigeria, the state is regarded as the wealthiest in the country. But there is a cost associated with these virtues and splendour. Additionally, it has the highest cost of living in all of Nigeria. As of 2023, Lagos State, the commercial powerhouse of Nigeria, has surpassed states like Ondo and Port Harcourt as the most costly state.
According to the national bureau of Statistics’ June 2023 record release, the inflation rate for Lagos State increased by 25.7%. This is measured against Nigeria’s average inflation rate of 22.7%. This suggests that prices have gone up by 25.7% in Lagos for products and services.
While this might be a great concern for the average individual living in Lagos, it could also be seen as the inevitable effects of many parameters that when considered may serve as a beacon of hope, especially for those that are into business and are ready to harness every opportunity that comes their way.
This article discusses at length why Lagos has become the most expensive state in the nation and how one can see through the lens to leverage this information to their advantage.
Reasons why Lagos is the most expensive state in Nigeria.
Generally, inflation has had a toil on the Nigerian economy and has affected Every state of the federation. Many factors have contributed to this soaring price in goods and services and recently is the Naira depreciation, and most importantly the removal of subsidies on petroleum products. A lite of PMS now costs about N700 in some quarters, and this has harmed everything from Food to rentals, amongst others, and the effects of this inflation are felt in every home in the nation.
However, Lagos state has stood out, as the state where the inflation has had more impact for the following reasons.
Overpopulation
With the increase in consumer products as a result of the increment in fuel, states like Lagos which have witnessed overpopulation tend to take more of the heat.
This is because, with the increase in goods and services, the demand for consumer goods and services remains the same, if not higher as a result of overpopulation. Hence, inflation is highest in Lagos because supply is still higher than demand despite inflation.
Nigeria’s economic hub
Nigeria’s commercial and financial centre is Lagos, which draws a lot of enterprises and investments. It provides a variety of career options and higher incomes than other states because it is the economic centre.
Increased demand for housing and basic services due to the influx of people looking for better employment opportunities raises total living costs.
Housing and real estate costs
Lagos state has a greater housing need than supply, which drives up the cost of real estate and rent. This problem is made worse by the state’s constrained and limited amount of land and the ongoing influx of individuals looking for work.
Because it’s difficult for real estate developers to keep up with demand, both buying and renting properties now cost more money.
Infrastructure development
To handle its constantly expanding population, Lagos continually works to upgrade its infrastructure. Despite being essential for the development of the city, these developments can have a high cost.
Higher taxes and utility costs for people may follow investments in infrastructure, including roads, bridges, and public amenities.
High cost of goods and services
Lagos draws a diverse group of firms and customers as Nigeria’s commercial hub. The increased demand for products and services raises prices across the board, from grocery to healthcare. Further, the expense of importing products through Lagos’ ports may result in higher retail costs.
High demand for basic amenities
Due to the city’s high population density, basic utilities like water, electricity, and sanitation are under a lot of stress.
A large investment in infrastructure and resources is necessary to meet the demands of such a large population, which may result in increased utility costs for locals.
Transportation costs
Due to the severe traffic congestion and the scarcity of public transport choices, transport costs in Lagos can be quite costly.
Residents’ transportation costs are increased by their reliance on private vehicles, their need for fuel, and their use of public transportation.
Educational expenses
Numerous famous schools and universities are among the educational institutions Lagos has to offer. However, the cost of a high-quality education is frequently higher, increasing the cost of tuition and other educational costs for families.
Healthcare costs
Lagos has world-class medical facilities available, however, the expense of healthcare can be high. Residents must devote a sizable percentage of their cash to medical expenses because private healthcare facilities with superior amenities are frequently more expensive.
Security concerns
Like any large metropolis, Lagos has security issues. Living expenses may rise as a result of the requirement for residents to make greater security investments or move to safer neighbourhoods.
High competition for jobs
In Lagos, there is a lot of rivalry for jobs due to the high population density. increased degrees or skill levels may be required to maintain a respectable quality of living, which would result in increased costs for education and training.
Conclusion
Lagos continues to be a desirable location for those looking for greener pastures, which strains resources and raises living costs. As a result, Lagos’ attraction as a vibrant and bustling city comes at a price. Lagos can be a rewarding city to live in, but to effectively handle the greater cost of living at this time, residents must carefully prepare their budgets.
It is also crucial to remember that the high cost of living in Lagos frequently has benefits, such as easier access to employment prospects, entertainment, and cultural events. Affordable housing and cost-effective living are major concerns for many Lagosians, and it is also quite difficult for people with low financial resources to acquire one.
It’s important to remember that the cost of living can change over time, and these causes could change as a result of numerous economic and demographic factors.
