Angola’s capital city, Luanda, has retained its position on Mercer’s latest Cost of Living survey as the most expensive city in Africa.

According to the annual report released by Mercer, a global provider of consulting, outsourcing and investment services, Luanda, outranked this year by Tokyo, Japan; is the second most expensive city to live in globally. Luanda’s rank was blamed on limited supply of decent housing in the Angolan capital.

Covering two hundred and fourteen (214) cities across five continents, “Mercer’s Cost of Living rankings” is the world’s most comprehensive study designed to help multinational companies and governments determine compensation allowances for their expatriate employees. It compared the cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment while using New York City as the base city for the rankings and the US dollar as the base currency.

The determinants for the Mercer’s Cost of Living rankings include the relative strength of the relevant currency against the US dollar in the 12 months between ranking (March 2011 to March 2012 in this case); and the price movements over the 12 month-period compared to those in New York City.

In addition to currency fluctuation and local price movements; cities’ ranks can also change based on the movement of other cities in the ranking, a statement released by Mercer stated.

According to Nathalie Constantin-Métral, Principal at Mercer, who is responsible for compiling the ranking each year, “Deploying expatriate employees is becoming an increasingly important aspect of multinational companies’ business strategy, including expansion. But with volatile markets and stunted economic growth in many parts of the world, a keen eye on cost efficiency is essential, including on expatriate remuneration packages. Making sure salaries adequately reflect the difference in cost of living to the employee’s home country is important in order to attract and retain the right talent where companies need them.”

The Mercer report indicated that the cost of housing is often the biggest single expense for expatriates and is the dominant factor in ranking African cities where an under-supply of secure and comfortable residential units often pushes rents above the global average.

Recent world events, including economic and political upheavals, have affected the rankings for many regions through currency fluctuations, inflation, and volatility in accommodation prices.

However, Tokyo Japan was adjudged the world’s most expensive city, taking over from Luanda in Angola at the global top spot. Karachi in Pakistan is ranked as the world’s least expensive city and is less than one-third as expensive as Tokyo.

Meanwhile Kenya’s capital, Nairobi, dropped from the 88th position and 108 in 2010 and 2011 respectively. The new ranking has placed Nairobi as Africa’s 22nd most expensive city dropping one place from last year’s position.

South Africa’s Johannesburg ranked 154th with Cape Town at 179th position- both cities fell 23 and 21 places, respectively. This reflects the considerable weakening the South African rand has suffered against the US dollar in the last year.

Tunis, Tunisia at number 209 remains the least expensive city for expatriates in Africa, down two places from last year, Mercer revealed.

The Mercer Ranking –Most expensive Cities in Africa

March 2012 March 2011

City Country
2 1 LUANDA ANGOLA
8 3 N’DJAMENA CHAD
20 12 LIBREVILLE GABON
26 44 KHARTOUM SUDAN
34 23 NIAMEY NIGER
36 61 KINSHASA DEM. REP. OF THE CONGO
39 41 LAGOS NIGERIA
39 63 BAMAKO MALI
41 67 ABIDJAN CÔTE D’IVOIRE
43 55 BRAZZAVILLE CONGO
44 39 DJIBOUTI DJIBOUTI
50 25 VICTORIA SEYCHELLES
50 44 DAKAR SENEGAL

Top 10 cities: Cost of living ranking
Mercer international basket including rental accommodation costs
Rankings March 2012 – March 2011 City Country
1 2 TOKYO JAPAN
2 1 LUANDA ANGOLA
3 6 OSAKA JAPAN
4 4 MOSCOW RUSSIA
5 5 GENEVA SWITZERLAND
6 7 ZURICH SWITZERLAND
6 8 SINGAPORE SINGAPORE
8 3 N’DJAMENA CHAD
9 9 HONG KONG HONG KONG
10 11 NAGOYA JAPAN

Source: Mercer

Top cities in the Cost of Living worldwide rankings, by region
AmericasAsia PacificEurope, Middle East & Africa

• São Paulo, Brazil (12th)
• Rio de Janeiro, Brazil (13th)
• Caracas, Venezuela (29th)
• New York, United States (33rd)
• Brasilia, Brazil (33rd) • Tokyo, Japan (1st)
• Osaka, Japan (3rd)
• Singapore, Singapore (6th)
• Hong Kong, Hong Kong (9th)
• Nagoya, Japan (10th) • Luanda, Angola (2nd)
• Moscow, Russia (4th)
• Geneva, Switzerland (5th)
• Zurich, Switzerland (6th)
• N’Djamena, Chad (8th)

Source: Guardian

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