Goats and Soda
12:00 pm
Wed July 16, 2014

Move Over Hong Kong: The World's Priciest Cities Are In Angola And Chad

Originally published on Wed July 16, 2014 1:23 pm

Ask someone to guess the world's two most expensive cities and it's a safe bet that the capitals of Chad and Angola — two of Africa's more impoverished nations — won't leap to mind. Geneva, perhaps, the home of Rolex watches, or one of those moneyed Asian capitals — Hong Kong, Shanghai, Singapore or Tokyo — or maybe, if you're thinking Nordically, somewhere in Scandinavia, somewhere like, say, Oslo, where a beer in a pub can famously set you back $15.

But Luanda? N'djamena?

Neither city has any Michelin-starred restaurants, glitzy shopping precincts or Maserati dealerships.

Nevertheless these two cities — Luanda, capital of the former Portuguese colony of Angola, and N'djamena, the hot and dusty capital of Chad — sit atop a list of 211 of the world's priciest compiled by New York-based human resources consultant Mercer in its 2014 survey of the world's most expensive cities for expatriate workers.

The survey takes into account the average local prices of a basket of 200 everyday items, ranging from the cost of housing to the price of a cup of coffee. The info is used by multinationals and governments to calculate costs and compensation for expatriate workers. Karachi, in Pakistan, came up the cheapest for expatriates — ranking 211th on the list. New York, London and Paris didn't even make the top 10.

Luanda heads the list for the second year running, while N'djamena — fourth place last year — eclipsed last year's second-most expensive city, Moscow, to finish just behind Luanda in the rankings.

Why are these two cities so expensive? Easy: Oil. Both Angola and Chad are rich in black gold. As a result, they've become magnets for oil companies and expat workers — none of whom wish to live like locals, with poor sanitation, high infant mortality and life expectancies 30 years less than expensive cities in the developed world. And so there are in effect two cities, sitting cheek to jowl — the down-at-the-heels one the locals know, and the one with nightclubs and swanky gyms and gated communities.

With safe, secure, Western-standard accommodation in short supply, and oil companies and their contractors known to have deep pockets, rents have soared to astronomical levels. A luxury three-bedroom home in Luanda can cost $15,000 a month compared with $12,889 for a similar place in Hong Kong — Luanda's nearest competitor in the rent stakes. The rent on a comparable house in (sixth-ranked) Geneva seems a mere snip at $6,477.

It isn't just housing that's expensive. The old Portuguese colony of Angola, still in rebuilding mode after a devastating 27-year-long civil war, is heavily reliant on imports, as is the land-locked sub-Saharan nation of Chad. Freight costs, import duties and profiteering — both countries rank high on Transparency International's list of the most corrupt places to do business — add greatly to the price of nearly everything.

Designer jeans and running shoes, CDs and international newspapers cost roughly double what they retail for in the U.S. or Europe, while a fast food meal in N'djamena — a club sandwich and a can of soda — will set you back $26, compared with the $14.18 you'll pay for a burger and fries in Zurich, Geneva or Bern — the three pricey Swiss cities ranked 5th, 6th and 8th respectively — and the $4.50 such a meal will cost you in the world's 10th most expensive city, Shanghai.

But some items are a bargain: In both Luanda and N'djamena, where life expectancies languish in the low 50s, beer and cigarettes are cheap. A packet of smokes in Luanda will set you back only about a quarter of New York City's $13 price tag.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.