Even though Angola is not among the richest countries in the world, the reason its capital is ranked as the most expensive city is due to a booming oil economy, a limited supply of expensive housing and high demand for it among expatriates. The cost of living there is higher than in any city in the world.
Luanda is the capital and largest city of Angola, a country in Southern Africa. It is the most populous and important city in the country as the Administrative Centre and the chief seaport, located on Angola’s coast near the Atlantic Ocean. The city has a metropolitan population of over 6 Million and the most populous Portuguese-speaking capital city in the world, ahead of Brasília, Maputo and Lisbon.
Luanda is divided into two parts, the old city and the new part or new city, with massive new luxury constructions and many developments taking place that will alter the cityscape significantly.
Luanda was founded on 25th January 1576 by a Portuguese explorer. The city has served as a slave trade to Brazil from 1550 to 1836. By 1850, Luanda was one of the greatest and most developed Portuguese cities in the vast Portuguese Empire outside Continental Portugal.
Angola got his independence on 11th November 1975 and by that time, Luanda was a modern city. During the Colonial Portuguese War (1964 – 1971), the cosmopolitan was not affected, his economic growth and development were listed among the highest in the region. In 1972, Luanda was called the “Paris of Africa”.
After independence, the country has suffered from the “Angolan Civil War” which last more than 26 years from 1975 to 2002. In 2002, Angola could turn at last to rebuilding its economy and society, its initial supply of high-quality housing was most likely limited at best.
One-third of Angola’s population live in Luanda, around half of them (exactly 53%), live in poverty. It is surprising how a city with such poor living conditions for most people, becomes the most expensive city in the world. There is no other reason, on the other hand, it is in the same city we have booming luxury constructions for the benefit of the minority wealthy from big oil industry and diamond production. Angola is the second oil export country after Nigeria on the African continent.
Even though the economic growth of Luanda is widely supported by oil extraction activities, on the other hand, Luanda has an excellent natural harbour; the chief exports are coffee, cotton, sugar, diamonds, iron, and salt. The Large investment (domestic and international), along with high economic growth, has dramatically increased construction of all economic sectors in the city of Luanda.
The main reasons why Luanda is ranked as the most expensive city are because of the high cost of rent, imported goods and security in the oil-rich nation.
Goods are very expensive, generally speaking, renting a two-bedroom apartment, you will pay on average an astonishing $6,800 per month, the Financial Times reported. The cost of imported goods and safe living conditions in this country are available at a steep price.
Angola’s GDP per head is just $7700 per year, so logically an average Angolan will only be able to pay one month for the whole year. So how is it possible to rent an entire year?
The case of Luanda is that expats cost of living varies wildly from those of locals for two fundamental reasons: supply and demand.
First the supply: Angola, a country rich in natural resources, among them the oil industry, which accounts for more than half the country’s GDP. Luanda draws in the petroleum industry.
Then the demand: companies offering employment respond by posting high wages and benefits, including high-end housing to attract more workers from around the world, all paying a premium for imported goods and security.
To get an idea about prices, you can check more details at Cost of Living in Luanda.
Video Source: Angola Monitor – Welcome to Angola – Luanda
*This article was first published in 2016.