How Luanda Became The World’s Most Expensive City?

How Luanda Became The World’s Most Expensive city?

Angola’s capital is the most expensive city despite not being among the world’s wealthiest nations due to the burgeoning oil industry, a shortage of luxury housing, and strong demand for it among ex-pats. There, living expenses are more than in any other metropolis.


The most expensive city in the world is Luanda, the capital of Angola. A two-bedroom apartment typically costs $6,800 per month to rent. The topic of how Angola’s cost of living has come to be so out of reach for most people is brought up by the fact that almost half of its citizens make less than $2 per day.

The current economic circumstance is the result of several causes:

1. The infrastructure of Angola was damaged during the civil war, which raged there from 1975 to 2002. Importing and exporting are, therefore, time-consuming and expensive processes.

2. The nation’s corporate elite, which dominates the import businesses, hasn’t done anything to reduce their profit. Third, despite most people living in abject poverty, Angola can maintain its status as more costly than Singapore or Hong Kong, thanks partly to its sizable ex-pat presence.

3. Finally, due to Angola’s second-largest oil reserves in Africa, a sizable ex-pat community in Luanda has a lot of disposable wealth.


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More About Angola

Official LanguagePortuguese
National languages      Kimbundu Umbundu Chokwe Kikongo

The Republic of Angola, sometimes known as Angola, is a nation on Southern Africa’s west coast. The country is the seventh-largest in Africa and the second-largest Lusophone (Portuguese-speaking) nation in terms of population and total area. Massive mineral and oil reserves make Angola one of the countries with the fastest-growing economies in the world, particularly since the end of the civil war.

However, economic development is highly uneven, with the majority of the country’s wealth concentrated in a disproportionately small part of the population. China and the United States are the country’s largest investment and trade partners. According to a 2008 article in The Economist, diamonds and oil account for 60% of Angola’s GDP, virtually all of its earnings, and all of its leading exports.

Rising oil production, which topped 1.4 million barrels per day in late 2005 and was anticipated to increase to 2 million barrels per day by 2007, is primarily responsible for growth.

The Oil Boom Sparked Infrastructure Development

The oil boom has attracted a variety of top oil industry managers, engineers, and geologists from the most significant oil businesses in the globe, all generously compensated and wanting a variety of goods, from basic household necessities to luxuries.

Even if most Angolans cannot afford to buy imported items, the expanding and affluent ex-pat population has developed a market for them, willing to pay the exorbitant costs. Because of the nation’s inadequate infrastructure and limited local manufacturing capacity, importing commodities is costly.

For example, a bottle of Coca-Cola costs roughly $10, while a bottle of Crystal champagne may cost up to $1,200. Similarly, renting a home might cost an ex-pat $10,000 per month.

Wealthy ex-pats paying $10 for a single bottle of Coca-Cola indicate significant wealth discrepancy when considering that most Angolans live on less than $2 per day. The only hope is that Angola’s oil boom would bring in enough money to repair the nation’s destroyed infrastructure and manufacturing capabilities. Unfortunately, this will also result in wealthy Westerners buying expensive things.

Battleground To Oilfield

The efforts made by Angola to revitalize itself through oil production, in collaboration with several foreign corporations, appear to be fruitful. With 2.31 percent of the world’s total oil output, the nation is now the 14th largest oil producer. Today, the Chinese alone buy about two million barrels a day from the nation.

Angola produced just 1.8 million barrels per day in 2012, according to the US Energy Information Administration; this suggests a consistent rise in output and capability. Angola ranks well with Nigeria, which produces more than 2.5 million barrels of oil per day.

Luanda’s history of civil conflict, followed by a surge in oil production, explains why it is not just Angola’s capital but also the most expensive city for foreigners to live in. Infrastructure around the nation was either deliberately destroyed or just allowed to crumble due to the civil war, which caused extensive devastation.

As a result of Portuguese underdevelopment, roads, trains, and water supply infrastructure was already deficient. In addition, a large portion of the nation’s productive capacity was underutilized and underdeveloped as young men were continuously drafted into opposing groups. At the same time, military operations once again actively destroyed productive assets, such as factories, farmland, and other types of machinery.

GDP Rise Post Civil War

Angola’s GDP grew astronomically once the civil war was over, rising by 23 percent in 2008, helped along by an influx of international investment. However, infrastructure and housing fell behind. As a result, only the ex-pat community in Luanda can now afford Angola’s current unaffordable standard of living.

Even though extreme poverty has decreased by 30% since the civil war, the economic disparity has increased dramatically throughout Angola’s oil boom. The country’s economic boom hasn’t done much for Angolans in the countryside other than making the capital city an expensive and unreachable place. The poverty rate in rural Angola is 57%, compared to 19% in urban areas.


Tens of thousands of employees of foreign oil companies from the United States and Europe have flocked to Luanda during the past ten years, buoyed by substantial cost-of-living benefits. Only Nigeria produces and sells more oil in Africa than the nation, which now produces 1.8 million barrels daily.

A failing state has become one of the economies expanding the quickest in the world because of the boom. For the native population, Luanda may not be the most expensive city in the world.

Still, due to the thriving oil industry, a shortage of quality housing, and strong demand among ex-pats, its cost of living is more than that of any other city in the world.

Why is Luanda so expensive?

●        For the native population, Luanda may not be the most expensive city in the world. Still, due to the thriving oil industry, a shortage of quality housing, and a strong demand for it among ex-pats, its cost of living is more than that of any other city in the world.

Is Angola an oil-rich nation?

●        The second-largest oil producer in sub-Saharan Africa is Angola.

Angola is governed by which nation?

●        Portuguese colonists started to trade in the 15th century, and in the 16th century, Luanda became the site of a colony. Portugal included Angola as an overseas province of Portugal in 1951 after annexing lands in the region governed as colonies since 1655.

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