Africa’s most expensive city: And the winner is…

Angola’s capital, Luanda, remains Africa’s most expensive city and is the 2nd most expensive for expatriates globally, according to the findings of the latest Cost of Living survey by ECA International.

Luanda, Angola

Luanda, Angola

While Luanda topped the list between 2007 and 2009, the top spot since then has been filled by Tokyo and now Caracas.

Among African cities Luanda is followed by Juba (4), Brazzaville (13) and Libreville (17) – all of which also feature in the global top 20. The cost of goods typically purchased by international assignees in these locations are likely to be high due to export and transportation costs. In addition, the commodity boom in recent years has led to currency appreciations in commodity-exporting markets like Angola.

However, many more African cities are positioned towards the bottom of the ranking. Maseru in Lesotho is the cheapest location not only in Africa but worldwide. The significant depreciation of the South African rand has contributed to the lower positions of South African cities and locations in countries where the currency is tied to the rand, including Lesotho. Johannesburg has fallen 13 places over the year and is now in 249th position followed by Cape Town (254) and Durban (255). Kenya’s capital, Nairobi, is in 183rd position.

To ensure that their employees’ spending power is not compromised while on international assignment, multinational companies will often include a cost of living allowance in their pay package. Living costs for assignees are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on assignee remuneration packages. To assist companies with their calculations ECA carries out two Cost of Living surveys per year, comparing a basket of like-for-like consumer goods and services commonly purchased by assignees in 440 locations worldwide.

A How we made it in Africa source who has been working in Luanda for several years stressed that some costs depend on where you shop in the area, with retailers such as Shoprite and Kero offering considerably cheaper products compared to other retailers typically known by foreigners and expats.