According to Mercer’s annual “cost of living” ranking, that was released today, Angola’s capital Luanda is the most expensive city in the world, ahead of more usual suspects like Hong Kong, Zurich, and Singapore. In financial terms: to rent a two bedroom apartment in Luanda, you will pay on average an astonishing $6,800 per month, the FT reported.
How is that possible? Angola’s GDP per head is just $7,700 per year. In other words, the average Angolan would only be able to rent a two-bedroom apartment for one month of the year. Surely the math doesn’t add up?
Angola is taking the world by surprise. With the recent explosion of advancements in healthcare, technology, and transportation the continent is seeing a major shift in the way of life. Luanda, Angola’s capital even now takes the number one spot for the most expensive city in the world for expats.
As you could imagine becoming one of the world’s most expensive cities isn’t always perceived as a positive. This is especially true for the native people of Luanda who are also affected and not yet adjusted to the big change in economy. Luckily the world has seen this pattern before, and this drastic change is the start of transformation that will greatly benefit the city and its people.
Last year Hong Kong took the number one spot for the world’s most expensive city for expats but it has also seen enormous industrial and economic growth over the past decade. While this may have seemed like a negative at the time, in the long run it benefited Hong Kong creating a strong substantial city.
The growth in Hong Kong’s economy is due to increase of integration to the global economy, better technology, investments in infrastructure, and increased production. That is why so many foreigners and business people flocked to the city to take advantage of all the different business opportunities the city had to offer.
According to an article in Bloomberg “International companies based in Hong Kong rose 53 percent since 1997, totaling almost 1,400 as of last year, according to government data.” So while being the most expensive city for expats may seem like a negative at the moment, Luanda will most likely follow in the footsteps of Hong Kong and become a strong developed city with plenty to offer.
In fact, Luanda has a great amount of oil reserves that has given them a ton of attention from investors. What people are now starting to realize is that Luanda also has a vast amount of natural resources, which is fueling the fire to their economic boom.
According to an article in Euro News, “It’s important for entrepreneurs in Angola to start looking at other sectors than oil. It’s a country with many resources, and we need to act responsibly, in a respectful and transparent manner, and invest in new technologies, to boost economic diversity and allow us to position ourselves on an international level.”The country has proven itself to be very profitable and many individuals are striving to take advantage of the resourceful land. The people of Angola are also starting to benefit from this, making an array of different job opportunities and advancements in their healthcare and technology.
Zandre Campos is chairman and CEO of ABO Capital, an international investment firm that invests in companies in the healthcare, energy, transportation, hospitality, education, technology and real estate sectors throughout Africa. ABO’s mission is to create global value for developing countries in Africa, while contributing to their economic development.