By Mark Kirumira
Posted Tuesday, July 19 2011 at 00:00
Kampala is the least expensive city in East Africa for expatriates, global consultancy firm Mercer’s latest survey on the cost of living this year, says.
This means Uganda’s capital is the best option for people who want to come and work in East Africa, in a world where attracting foreign technocrats and diplomats, who are paid in foreign currency, is an impetus for spurring economies and improving relations between countries.
Mercer’s Cost of Living survey 2011 ranked Kampala at 202 in the world, having dropped 16 places. Nairobi, which supposedly has more foreign missions and international organisations, is at 108 down from 88 last year.
The second best bet for expatriates is Dar es Salaam, ranked at 187, and Kigali in position 156.
On the continent, Uganda is 40, Dar es Salaam 36, Kigali 29 and Nairobi 23 out of the 43 countries that were surveyed. The survey, which was done in March, covered 214 cities worldwide and compared costs of items such as food, housing, transport, entertainment and clothing. Its parameters for determining cost of living are inflation, exchange rate fluctuation, security, and natural disaster.
Weak Shilling plays
Analysts said Kampala’s improved position hinged on its relative low accommodation rates compared to other cities in the region. Other factors that could have helped are the weakening Shilling against the US Dollar and Euro. The Shilling recently hit a record low of 2,700 compared to when it was about 2,100 against the dollar this time last year.
A weak Shilling means it is less costly for a foreign firm to foot the bills of its workers in Uganda and the expatriate can spend less on goods and services than his colleague, for instance, in Sydney or Zurich under similar remuneration terms.
Luanda, Angola’s capital, remained the world’s most expensive city to live in for the second consecutive year followed by Tokyo, Japan and N’Djamena in Chad in third place. Moscow follows in fourth position with Geneva in fifth and Osaka in sixth.
Ms Nathalie Constantin-Metral, a senior researcher at Mercer, said the survey is designed to help multinational companies and governments determine compensation allowances for their expatriates. All cities are compared against New York.
She said the issue of companies finding suitable accommodation for their employees in Africa is a big challenge. “The cost of living in cities across Europe has remained relatively stable, while in Africa the picture is patchy with the limited availability of accommodation leading to increased costs in key cities,” she said.