Angolan financial climate

High prices for expats

Angolan financial climate

Angola’s capital city, Luanda, has been voted the most expensive city to live in by the 2015 Mercer survey.

The so called ‘Paris of Africa,’ is a pricey expat hot-spot though lacking social glue. There is a striking difference between the wealthy, overcharged expats and the living standards of the poverty stricken locals.   

Over half (53%) of the population actually live below the poverty line according to Usaid and life expectancy is estimated at 52 years. An apartment in Luanda will cost an expat between US$6,000-10,000 per month, while labourers earn about US$50 a month in constructing these buildings.

Hope for the country’s development does exist as Angola has one of the fastest growing economies in the world with an annual GDP growth of over 11.6% over the past decade. The percentage of those living under the poverty line is decreasing, albeit slowly. It is a country rich in natural resources, such as crude-oil, gas and diamonds and foreign investors are keen to support Angola’s development.

Why is Luanda so expensive?

The reason for housing being so expensive is that there is a big property demand from expats and there are very few houses or flats available. The number of millionaires living in the southern African country is expected to double in number reaching  15,600 by 2030. Although you will pay at least 1 million dollars to buy property, don’t expect it to be a luxury house to show-off to your friends. In fact, water shortages and an erratic electricity supply means that you should expect to sometimes be left in the dark.

There are many other reasons to blame for the gross financial divide. One reason is that because of Angola’s natural resources, many oil and resource experts are flocking to Angola for work purposes. This has led to an import culture, where many products such as food and clothing are transported in by using an import agent licensed by the Ministry of Commerce. In fact, a simple dress from the high street store H&M will cost you around US$105 and a pair of Levi jeans about US$150. The only cheap purchase you can expect to make is a gun. An AK-47 will cost you just over US$28.

However, the main reason for the high prices and economic divide is the decades long Civil War which ended in 2002. Shortly afterwards and during, there was a limited supply of housing. Suddenly when peace was declared and trade routes opened, new companies and their workers rushed to Angola. Unfortunately offices and housing were and still are, in very short and bad supply.

As with any ‘Ouro Negro’ (black gold) country you can expect mass corruption. This means that outside of Luanda you can buy 100 avocados for US$10. Yet, to get produce into town, farmers must bribe the local police, thugs and soldiers. By the end of this, just one avocado will cost you around US$5.

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