Here's Why Poverty-Stricken Luanda Is One Of The World's Most Expensive Cities

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Mumbai among world's worst city to live in
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Mumbai among world's worst city to live in

We recently took a look at the 20 most expensive cities for expats, based on rankings by global management consulting firm ECA International.

Most of the cities that made the list are sprawling, lucrative metropolitan hubs that are notorious for their high prices, like Tokyo, Moscow, and Oslo.

But a few big cities in poor and developing countries also made the list. Juba, South Sudan, and Port Moresby, Papua New Guinea, ranked highly, for example.

And Luanda, Angola — where the average per capita income is $740  — ranked fourth.

So why do those cities rank so highly on ECA's list?

Remember, the list compiles the cost for expats living abroad, not locals. International businesspeople tend to purchase a similar, more expensive basket of goods.  Supply, government restrictions, and inflation have a strong affect on prices in the developing world, and that's especially true of luxury or imported goods, Steven Kilfedder, ECA's m anager of Cost of Living and Remuneration Services, told Business Insider.

"In a country like Angola, expats are going to be buying very different products from the other locals in the country, " Kilfedder said. " They will be buying more imported goods — brand names from their home countries for example, which are often much more expensive based on import restrictions."

Juba, the capital of newly-independent South Sudan, is a telling example. Since the country gained its independence in July 2011, it has seen an influx of expats who are interested in doing business in the country — aid workers, oil companies, and foreign government workers working to establish working relations between South Sudan and their respective homelands.

The increased demand has led to inflation and price spikes. That's why it moved from #60 to #14 on ECA's annual list this year, and a dozen eggs cost $5.51, a dollar more than they would cost in Manhattan.



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