Lagos and Abuja have been listed among
the top four cities in Africa with high cost of living, according to an
index released by the Economist Intelligence Unit (EIU) on 25 African
cities.
The key results of cost of living per
city by the EIU reveal that Abuja is the second most expensive city with
total expenditure score of 107.4, next to Luanda with a score of 131.8,
while Lagos comes fourth with 100.8 total expenditure, as Addis Ababa
came last with a score of 60.8.
A breakdown of the index shows that
Abuja emerged number 12 out of 25 cities, in terms of consumption of
alcoholic beverages, tobacco and narcotics, scoring 78.3, while Lagos
scored 63.8 to emerge number 21 of the cities that consume same.
Meanwhile, Khartoum in Sudan comes tops
on the list of cities with highest consumption of alcoholic beverages,
tobacco and narcotics, scoring 121.3. On the other hand, Douala in
Cameroon ranked last of the 25 cities sampled with 46.9 consumption
rate.
In terms of transport, Lagos and Abuja
emerged 15 and 22 out of the 25 cities, scoring 107.5 and 91.7,
respectively. Top in the list is Abidjan with 172.0 score spent on
transportation, while Alexandra in Egypt came last with a score of 71.7.
According to the EIU, per capita
expenditure is higher in each of the sampled cities, as the index
indicates that citizens in cities spend 94.4 percent more, per capita,
than their counterparts in the countryside.
“Africa is urbanising fast and cities
are attracting more and more migrants. As a result, we are witnessing
the emergence of “super cities”- each bringing considerable
opportunities. The demographic profile of these cities can be much
different than the national level picture,” the EIU notes in the survey.
Africa’s growth is becoming more diverse
as a result, companies are more interested than ever in expanding into
Africa, it says further.
A recent survey conducted by The
Economist Group of 217 global companies based in 45 countries reveals
that expansion in Africa is a priority for two thirds of them within the
next decade.
EIU’s key result of expenditure per
capita differs markedly across cities. For instance, US$/per capita
expenditure of Abuja and Lagos are 2,185 and 2,159, respectively, in
terms of total expenditure on all items.
Johannesburg in South Africa emerged
number one of the cities with highest US$/per capita expenditure,
scoring 7,436, while Dar es Salam in Tanzania spend is lowest, scoring
572 US$/per capita expenditure.
A breakdown of the US$/per capital
expenditure indicates that Lagos and Abuja scored 4 and 3, respectively,
in terms of spend on alcoholic beverages and tobacco.
In the area of transport, US$/per capita
expenditure of Abuja and Lagos stood at 157 and 147, respectively.
Tripoli in Libya emerged the top most city with 1,780 US$/per capita
expenditure on transport, while Lusaka in Zambia is at the bottom of the
list with 31.
Even though, it says challenges remain,
which include corruption, poor roads, inefficient border posts,
inadequate railway networks, poor skill base, congested ports, and
unwitting airports, among others.
To the EIU, to expand, companies need
Africa city-level data and analysis, as “companies looking to expand
into Africa want to concentrate their strategy where growth and
demographics are most favourable – in major cities. It is not enough to
plan a strategy around nationally-forecasted growth, but rather to have
critical forecasting and business information on a particular city.”
The Economist Intelligence Unit also
notes that 25 African cities present best opportunities for growth -
based on key economic drivers, client feedback and a survey of
economists.
In Corporate Network members, the EIU
identifies 25 African cities (across 19 countries) that are of
particular interest. The EIU collects and analyses the data needed to
support the case and strategy for market entry.
Source: Businessdayonline.com
