The city of Luanda, Angola, has been knocked from its position as the world’s most-expensive city, a recent survey by global consultancy firm Mercer has revealed. And which city has taken Luanda’s place? Hong Kong. Here, Face2Face Africa explores why Luanda remains so expensive.
Luanda, which now sits in second place, has maintained its position as one of the world’s most-expensive cities in surveys taken over the last couple of years.
The Mercer cost of living survey calculates and ranks the cost of living for expats in 209 cities around the world using a basket of consumables and other necessities, which includes clothing, food, housing, transport, and health care.
As a country, Angola is abundantly rich in mineral resources and is the second-largest oil producer in Africa.
Foreign investors, especially oil companies, naturally find Angola very attractive and have continued to invest in the country, bringing their crew of expats and foreign nationals in tow.
But despite the inflow of foreign investment, there remains a critical insufficiency of good quality infrastructure.
In fact, Angola has only just begun the process of rebuilding its economy and institutions after a prolonged civil war that went on for more than 25 years.
For instance, decent accommodation spaces for offices and/or housing remain in short supply, with the cost of an average apartment in a choice part of Luanda rivaling prices in Manhattan.
Luanda has a high crime rate and security continues to remain a challenge with expats often having to provide their own security detail.
Angola also imports most of its consumables, particularly food and clothing, since its local industries do not have the capacity to meet demand.
The high cost of importation in to Angola has also helped to drive prices through the roof in addition to government-backed oligopolies, bribes, corruption, red tape, and the mismanagement of resources.
Ironically, the vast majority of Angolans in Luanda and elsewhere live below the poverty line and have benefited little from the countries mineral wealth, thus the majority of Luanda’s people live in the city’s slums away from that over-the-top cost of living.
Source: Face2face Africa