A sustained climb in the prices of goods and services has pushed Nairobi back into the list of 100 most expensive cities in the world, making it a more costly location for expatriate workers.
The Kenyan capital leaped 26 places to become the world’s 97th most expensive city this year, according to a Mercer Cost of Living report released Wednesday.
Nairobi, which was in 2018 ranked at position 123 out of the 209 cities surveyed, last appeared in the list of top 100 most expensive cities in 2010 when the global consultancy firm placed it at number 88.
Mercer’s cost of living and rental accommodation index is based on changes in prices of some 200 goods and services that are commonly purchased by expatriates.
The items are grouped as food, alcohol and tobacco, domestic supplies, housing, utilities, clothing and footwear, recreation and entertainment, home services, personal care and transportation.
This year’s report is based on a survey conducted in March 2019 after the global consultancy firm reviewed prices of items such as a single cinema ticket for the latest international release, men’s blue jeans, a cup of expresso coffee at a popular café, a litre of petrol and fast food meal for one person in each of the 209 cities.
Kenya’s inflation rate averaged 4.69 percent last year, down from 7.99 percent in 2017, indicating that other cities recorded a lower rate of increase in prices of goods and services than Nairobi.
The exchange rate of the Kenyan shilling, which has generally held stable against the US dollar, has also played a significant part in the ranking that sets Nairobi apart as the most expensive city in East Africa and 14th in Africa.
Governments as well as organisations with cross-border operations often rely on Mercer data to protect the purchasing power of their employees and to compute fair housing allowances for expatriates.
“Each African country has its own unique economy and this is why multinationals need not approach their expatriate packages for Africa with one single strategy,” Yolanda Sedlmaier, principal leader – Africa Mobility at Mercer, said in a statement.
Nairobi already hosts several multinational firms and multilateral agencies such as the headquarters of the United Nations Environment Programme (Unep), IMF and the World Bank Group, which have hired hundreds of expatriates who are paid in dollars. It also hosts several diplomatic missions that pay their staff in foreign currencies.
Chad’s capital N’Djamena, at global position 11 is the most expensive city in Africa followed by DR Congo’s Kinshasa (22), Gabon’s Libreville (24), Nigeria’s Lagos (25) and Angola’s Luanda (26).
The survey has ranked Hong Kong as the world’s most expensive city for expatriates for the second year running, with eight of the top 10 cities being from Asia, including Tokyo (2), Singapore (3), Seoul (4), Shanghai (6), Ashgabat (7), Beijing (8) and Shenzhen. Ashgabat is the capital of Turkmenistan.