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Lewis Njoka @lewisNjoka

Nairobi has improved 50 places to drop out of the top 100 most expensive cities in the world for the first time in three years, a new study shows. 

The country’s capital and largest city improved 50 places to become the world’s 145th most expensive city this year out of the 209 cities surveyed, according to the just released Mercer Cost of Living City Ranking report. Last year, Nairobi was ranked as the 95th most expensive city for expatriates to live in out of the 209 cities.

As international business travel and assignments tentatively resume, the cost of living in cities around the world fluctuated over the last 12 months and this findings helps travellers and businesses to ensure spending power is maintained overseas during work.

The ranking looked at changes in over 200 items including housing, transportation, food, clothing, household goods and entertainment.

Other factors considered include price changes that resulted from Covid-19 relief measures in the various countries surveyed, a factor that might have given Nairobi an edge over competition in this year’s ranking.

Before this year’s ranking, the Nairobi’s best was in 2014 when it was ranked the 147th most expensive among the cities surveyed at the time.

Mercer’s biannual Cost of Living Survey helps employers navigate expatriate compensation, accounting for factors such as currency fluctuations, cost inflation for goods and services, and instability of accommodation prices which are essential to determining the cost of compensation packages for employees on international assignments.

Eastern Africa region

Within the Eastern Africa region, Nairobi ranks poorly and is more expensive than Addis Ababa (194), Kigali (175), Kampala (171) and Dar es salaam (167).

The exchange rate of the Kenyan shilling plays a significant part in the ranking that sets Nairobi apart making it costlier than Cape Town, Johannesburg, Gaborone and Lusaka among other African cities.

The state, firms and non-governmental organisations that offer cross-border operations leverage data from Mercer data to protect the purchasing power of employees and to compute fair housing allowances for expatriates. 

Nairobi also hosts major multinational firms and agencies including the United Nations Environment Programme (Unep), IMF and the World Bank Group, which hire expatriates who are paid in dollars.

It also hosts several diplomatic missions that pay their staff in foreign currencies.

However, on the continent, the most expensive cities are N’Djamena in Chad, Lagos in Nigeria and Libreville in Gabon ranked position 13, 19 and 20 respectively.

Lusaka in Zambia emerged the most affordable city in Africa and the second most affordable overall at position 208 out of 209.

The most expensive city globally, as per the ranking, is Ashgabat (Turkmenistan) followed by Hong Kong and Lebanon’s Beirut city.