A new report has shown that Nairobi has become a prime destination for international workers with a lower ranking in annual list of the world’s most expensive cities to live in for expatriates.
In the 2024 Cost of Living City Ranking by American consulting firm Mercer, Kenya’s capital was ranked 201st out of 227 most expensive cities in the world.
This represents a drop of 28 places from last year, when Nairobi was ranked 173rd on the list of the most expensive cities for expatriates.
This is pegged on the depreciation of the shilling compared to the dollar, as the expatriates’ purchasing power has reportedly surged, enabling them to live comfortably in the country.
This argument may seem less convincing given that the shilling has strengthened in 2024, which could impact the cost-benefit appeal for expatriates. The shilling has improved to 129.25 per dollar from its lowest point of 161.43 in February. Nevertheless, Kenya continues to attract expatriates due to its economic growth, enhanced infrastructure, and high quality of life.
With the strengthening of the shilling, inflation also remained stable. According to the Kenya National Bureau of Statistics (KNBS), prices for transport, housing, some food commodities, and utilities fell to a four-year low in June 2024.
Consumer prices rose by 4.6% year-over-year in June, down from 5.1% in May and the lowest rate since September 2020. This stability in the overall inflation rate, despite rising prices in some areas, might contribute to Nairobi’s appeal for expatriates due to its relatively affordable cost of living.
On the continent, African cities placed highest in the global cost of living ranking are Bangui ,Djibouti and N’Djamena. The lowest were Blantyre, Lagos and Abuja.
“African cities that placed highest in the global Cost of Living City Ranking are Bangui (14, up 12 places), Djibouti (18) and N’Djamena (21). The least expensive cities in the region include Blantyre (221), Lagos (225, down 178 places) and Abuja (226),” the report read.
Globally, Hong Kong, Singapore, and Zurich remained the most expensive cities for international employees this year, due to costly housing markets, high transportation expenses, and elevated costs for goods and services.
The least expensive locations in the ranking include Islamabad, Lagos and Abuja due to the demonstrably lower costs of living of international assignees have, in part, been driven by currency depreciations.