Luanda Angola’ the Most Expensive City in Africa

Mercer’s “cost of living” ranking shockingly lists Angola’s capital, Luanda, as the world’s most expensive city, surpassing typical high-cost locations like Hong Kong, Zurich, and Singapore.

For example, renting a two-bedroom apartment in Luanda costs an average of US$6,800 monthly, as reported by the Financial Times.

This seems implausible considering Angola’s GDP per capita is just $7,700 annually. The average Angolan could barely afford such rent for a single month each year. It’s a clear case of incomparable scenarios.

The top 10 cities in this list are as expected, featuring affluent places like Zurich, Geneva, Bern, Singapore, and Hong Kong, reflecting their high per capita GDPs. However, the inclusion of cities like N’Djamena (Chad) and Luanda is unexpected.

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Mercer listed Luanda Angola as the Most Expensive City in Africa

Mercer’s list primarily considers the living costs for expatriates, not local residents.

For instance, an average Angolan household might pay only about $200 per month for an apartment, a figure not accounted for in expat-focused calculations.

Luanda’s high expat living costs stem from two main factors: supply and demand. Post-civil war, Angola’s limited supply of high-quality housing couldn’t keep pace with the rapid economic growth fueled by oil reserves.

This discrepancy meant a slower increase in quality housing supply compared to economic recovery.

Demand plays a role too. Luanda and N’Djamena lack the allure of cities like Rome, Paris, or New York. To compensate, companies offer high wages and benefits to attract expats, including luxurious housing.

Angola’s oil-driven economic boom has attracted many foreign workers, increasing demand for high-end housing.

Thus, while Luanda isn’t necessarily the most expensive for locals, its limited luxury housing and high demand among expats make it the world’s costliest city for them.