Better Know an African City: Mercer Cost of Living Survey 2012

Better Know an African City – Mercer Cost of Living Survey 2012 is part of an ongoing series of posts on African cities on Cherchez la Curl.  The series aims to collate information on and expose the quirks, infrastructure and beauty of Africa’s cities so as to facilitate discussion that will help their leaders make them better and more livable.

Swag Like Us

June 12, 2012 was groundhog day for me. On this day consulting firm Mercer released their annual cost of living survey, and for the third year in a row two African cities ranked amongst the ten most expensive cities in the world, with Luanda (Angola) ranking 2nd and Ndjamena (Chad) ranking 8th. That Luanda and Ndjamena’s rankings have declined from their 2011 positions (1st and 3rd, respectively) offers little comfort to the implications the rankings have on the economic divide that persists amongst the cities’ residents. Of the 50 most expensive cities in the world, 13 are African, i.e. 26%!

According to Mercer “[t]he survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including transport, food, clothing, household goods and entertainment. The cost of housing is also included and, as it is often the biggest expense …, it plays an important part in determining where cities are ranked.” While the survey is typically used by multinationals to determine stipends for their expats, I like to think of the rankings of the African cities as a metric indicative of Quality of Life, similar to Monocle’s annual ranking of cities. While it isn’t necessarily ideal for a city to offer the cheapest ranking (Karachi ranked “cheapest” in this year’s survey), a moderate ranking in a city with a developing economy is somewhat indicative of a somewhat cohesive relationship between private enterprise and the public sector: the presence of potable water, transport systems and networks, and a steady supply of electricity by government enabling private enterprise to supply citizens with goods and services at globally competitive rates.

Every year I tear through Monocle’s ranking to see where cities fare relative to the previous year’s ranking and whether new entrants have met the magazine’s requirements. It isn’t a complete surprise an African city is yet to make the list. However, I think the Monocle ranking provides a benchmark for city leaders, governors and local government heads to aspire to when shaping the futures of their respective cities. In lieu of an actual survey ranking African (developing) cities against metrics relevant to their growth and development, the Mercer survey provides a sort of benchmarking of how well these cities are “working.” For example, Ndjamena is ranked 8th most expensive globally whilst also being one of Africa’s more underdeveloped cities.  Compare this Johannesburg, one of Africa’s most developed cities and no where near the top 50, and Lagos coming in at 39. To my mind, an “expensive” African city is an inefficient African city.

Quality of Life vs. Cost of Living

My academic background involves lots of math and my day job involves putting together various charts and such, meaning I am predisposed to plotting “things” and referring to these “things” as metrics. I was curious to see what, if any, was the relationship between the cost of living and the quality of life so I cross-referenced Monocle’s quality of life ranking (25 cities) against Mercer’s cost of living ranking (top 50 cities) and obtained the chart above. The results were very interesting.

Firstly, it is telling that there is only a 10-city overlap between the two lists, i.e. of the 25 cities in the world ranked highest in terms of quality of life, only 10 were ranked amongst the most expensive in terms of cost of living. None of those ten cities were African. Also, of those ten cities, there appears to be a negative correlation between quality of life and cost of living*. Aha! Interesting! This somewhat supports my argument that driving down the cost of living in African cities may contribute to an improved quality of life for the cities’ residents. I would love to get my hands on a quality of life ranking for (Africa’s) major cities and perform a more comprehensive analyses.

For the record, the remaining African cities ranking amongst the 50 most expensive in the Mercer list are Brazaville, Congo (43); Abidjan, Cote d’Ivoire (41); Kinshasa, DRC (36); Djibouti, Djibouti (44); Libreville, Gabon ( 20); Bamako, Mali (39); Niamey, Niger (34); Dakar, Senegal (50); Victoria, Seychelles (50) and Khartoum, Sudan (26).

Thoughts, comments on the ranking and quality of life in Africa’s cities?

*Admittedly the statistical significance of this relationship is dodgy given the small sample size