Ethiopia has officially become the most expensive country to live in across Africa, according to the newly released Cost of Living Index by Country 2025, which places the country 53rd globally.
Cost of basics pushes Ethiopia to the top
Published by Numbeo, the world’s largest crowd-sourced cost database, the latest index gives Ethiopia a cost of living score of 46.5, ranking it highest among African nations. The index evaluates essential daily expenses such as groceries, transport, restaurants, and services—revealing that Ethiopians now pay significantly more for basic needs than their continental peers.
The high cost of food and household goods is the single biggest factor behind Ethiopia’s position, making it harder for families to afford their weekly essentials—especially those living on fixed incomes.
Living expenses outpace income growth
Despite relatively low average rent, Ethiopia’s overall cost burden—across food, housing, utilities, and services—remains disproportionately high. Everyday services like dining out and local transport are also becoming costlier, squeezing household budgets across urban and rural areas alike.
The country’s transportation index shows that even basic mobility has become expensive. Whether commuting to work or accessing markets, the average Ethiopian is now paying more than residents in most other African countries.
Regional cost comparisons
Following Ethiopia on the cost-of-living scale are Botswana, Mozambique, Côte d’Ivoire, Somalia, Cameroon, and Mauritius, with Zimbabwe ranking lower despite its volatile inflation history.
The results challenge assumptions that Ethiopia remains one of Africa’s more affordable destinations. In reality, recent changes in the macroeconomic environment are reshaping the cost landscape.
Economic reforms reshape household spending
The report coincides with Ethiopia’s ongoing economic transition. Over the past year, the government has implemented currency reforms, phased out key subsidies, and cut public spending to attract investment and stabilise the economy.
However, these measures have led to sharp price increases, especially in energy and imported goods, amplifying the strain on consumers. While officials aim to boost long-term economic competitiveness, in the short term, many households are being priced out of basic services.
The takeaway
Ethiopia’s rise to the top of Africa’s cost of living index reflects more than just rising prices. It underscores a deeper disconnect between policy reform, inflation, and purchasing power on the ground.
As one analyst put it: ‘Ethiopia may be open for business, but for many citizens, daily life has never been more expensive.’
Credit: Africabrieifing
