The Kenyan capital, Nairobi is now ranked Africa’s second most expensive city after Nigeria’s Lagos, putting to test its ability to attract foreign investment and tourists.
This latest ranking is the opposite of last year’s edition when Nairobi was listed as the second least expensive city in Africa after Egypt’s Cairo.
The new survey did not include Angola’s capital Luanda, which has consistently ranked as Africa’s most expensive city.
The Economist Intelligence Unit (EIU), the UK firm that conducted the research, said the change in Nairobi’s ranking is linked to the steep rise in the cost of six goods in a basket used to measure relative prices.
The survey found that the Kenyan capital is particularly expensive for the middle and upper class residents who consume luxury goods and prefer private cars to public transport.
The high cost of living in the Kenyan capital is mainly driven by the prices of consumer goods such as petrol, beers and wines. A litre of petrol costs an average of $1.3 in Nairobi, up from $1.24 last year – nearly five times the $0.35 price that consumers are charged in Cairo and Lagos’ $0.61.
Egypt and Nigeria offer heavy subsidies to consumers of petrol while Kenya did away with all subsidies in the early 1990s.
The price differences are equally high in Nairobi’s wines market where a 750 ml bottle costs an average of $12.23 compared to $10.09 in January last year.
A similar quantity of wine costs an average of $7.81 in Johannesburg, Lagos ($11.48), Cairo ($7.06) and Pretoria ($8.21).
Nairobi’s consumers are however bearing a lighter burden in the foods compared to other African cities. EIU found that a kilogramme of bread costs $1.4 or nearly half the $2.47 price in Lagos.
EIU says highly priced consumer goods have eroded the quality of life for millions of Nairobi residents than the previous year when the city ranked 174 in the quality of living index prepared by Mercer – an international human resource consultancy.
EIU has placed Nairobi in the 177th position in the quality of living index.
Austrian capital Vienna is the city with the highest quality of living, followed by Zurich, Auckland, Munich, and Vancouver, according to the EIU index.
This year’s index shows that residents of Nairobi are enjoying a lower quality of living than those who live in the Ugandan capital Kampala which is ranked 162.
NMG
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