Luanda: The Angolan capital, Luanda, is no longer regarded as one of the most expensive cities globally, a label it held from 2010 to 2020, as reported by Mercer, an international consultancy firm. According to the "Ranking of Cities with the Highest Cost of Living in 2024" report, this change is indicative of a structural transformation within the African urban economy.
For over a decade, Luanda consistently ranked among the top positions in Mercer's global cost of living index, even surpassing cities such as New York, London, Hong Kong, and Singapore. However, this trend has now shifted, with the 2024 report highlighting Luanda's significant drop in the global cost-of-living ranking between 2023 and 2024.
Mercer attributes Luanda's drop in the rankings primarily to the devaluation of the exchange rate and adjustments in international costs measured in US dollars. Analysts also point to structural transformations within the Angolan economy, including a more balanced real estate market, the gradual expansion of national production, and a relative slowdown in inflationary pressures. Luanda's new ranking may offer strategic advantages for Angola, where high urban costs previously acted as an indirect barrier to foreign investment, inflating the operational costs of multinationals and other industries.
With the urban costs becoming more balanced, Angola is enhancing its regional competitiveness, particularly as it focuses on expanding the Lobito Corridor, promoting agricultural growth, and diversifying its economy through mining and other sectors. The current ranking identifies Bangui in the Central African Republic, Djibouti, and N'Djamena in Chad as the most expensive African cities for expatriates, surpassing major global economic hubs such as Paris, Amsterdam, Melbourne, and Madrid.
Conversely, cities like Blantyre in Malawi, Lagos and Abuja in Nigeria, Windhoek in Namibia, and Durban in South Africa are at the lower end of Africa's cost rankings. Notably, Abuja has been named the cheapest city in the world for expatriates, occupying the last spot in the global ranking. The report reflects a continent experiencing a divide between urban centers burdened by inflation and high costs and those that have become more accessible due to currency devaluations and economic adjustments.
The study, using New York as a benchmark, evaluates international costs in US dollars across 226 cities on five continents, covering over 200 products and services, including housing, food, transportation, education, and entertainment. Mercer, a global management consulting firm, specializes in employee well-being, careers, compensation, and investments, with its subsidiary Marsh McLennan supporting organizations in optimizing salary structures, pension plans, and talent management.
