Nairobi among world expensive cities for expatriates

Kenya’s capital city Nairobi is among the top one hundred most expensive cities in the world for expatriates to live in, a new survey by Mercer reveals.

Within the African continent, Kenya is ranked 15 behind Seychelles, Chad, Nigeria, Democratic Republic of Congo, Gabon, Cote de Ivoire, Congo, Central African Republic, Cameroon, Djibouti, Ghana, and Senegal.

The Mercer 2020 cost of living survey ranks Nairobi at 95. Hong Kong tops the list of most expensive cities for expatriates, followed by Ashgabat, Turkmenistan in the second position. Tokyo and Zurich remain in third and fourth positions, respectively, whereas Singapore is in fifth, down two places from last year. New York City ranked sixth, moving up from the ninth place.

The study’s 2020 Cost of Living Ranking highlights the results for 209 cities across five continents, measuring the comparative costs of more than 200 items in each location.

The survey also highlights essential factors such as currency fluctuations, cost inflation and accommodation price instability in determining the cost of expatriate packages.

The overall Cost of Living Index reflects the prices of over 200 items from Food, alcohol and tobacco, domestic supplies, housing, clothing and footwear, home services, utilities, personal care, transportation, recreation and entertainment.

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai (7), Bern (8), Geneva (9), and Beijing (10). The world’s least expensive cities for expatriates, according to Mercer’s survey, are Tunis (209), Windhoek (208), Tashkent and Bishkek, which tied to rank 206.

The survey is designed to help multinational companies and governments determine compensation strategies for their expatriate employees. New York City is used as the base city for all comparisons and currency movements are measured against the US dollar.

“Border closings, flight interruptions, mandatory confinements, and other short-term disruptions have affected not only the cost of goods and services but also the quality of living of assignees,” said Ilya Bonic, Career President and Head of Mercer Strategy.

“Climate change, issues related to environmental footprint, and health system challenges have pushed multinationals to consider how a city’s efforts around sustainability can impact the living conditions for their expatriate workers. Cities with a strong sustainability focus can greatly improve living standards, which can, in turn, improve employee well-being and engagement.”

Properly vetting locations and compensating employees on international assignments is as important as it can be costly. Mercer’s survey shows that costs of goods and services shift with inflation and currency volatility making overseas assignment costs sometimes greater and sometimes smaller.

“Sudden changes to exchange rates has been mainly driven by the impact COVID-19 is having on the global economy,” said Yvonne Traber, Global Mobility Product Solutions Leader at Mercer.

“This volatility can affect mobile employees in a variety of ways, from shortages and price adjustments for goods and services, to supply chain disruptions or when employees are paid in home country currency and need to exchange funds into the host country for local purchases.”