VENTURES AFRICA – Kenya’s capital, Nairobi, is now ranked Africa’s second most costly city after Nigeria’s Lagos, according to Kenya’s Business Daily.
The daily attributed this to a steep surge in the cost of living, diluting the quality of life for its residents. This puts paid to the city’s ability to entice foreign investment and tourists.
According to the Economist Intelligence Unit (EIU), which conducted the research, the latest ranking is the opposite of last year’s edition. Last year, Nairobi was listed as the second least pricey city in Africa after Egypt’s Cairo.
EIU said the new survey excluded Angola’s capital Luanda, which has consistently ranked as Africa’s most expensive city in recent years.
EIU said the change in Nairobi’s ranking was linked to the steep increase in the cost of six goods in a basket used to measure relative prices.
The research found that the Kenyan capital is particularly expensive for the middle and upper class residents who consume luxury goods and prefer private cars to public transport.
The high cost of living in the Kenyan capital is mainly driven by the prices of consumer goods such as petrol, beers and wines.
According to Business Daily, a litre of petrol costs an average of $1.3 in Nairobi, up from $1.24 last year – nearly five times the $0.35 price that consumers are charged in Cairo and Lagos’ $0.61.
Egypt and Nigeria offer heavy subsidies to consumers of petrol while Kenya did away with all subsidies in the early 1990s.