Guest blog: Luanda – why so expensive?


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A Happy New Year to you all and welcome to 2013. This coming year looks like it will be a busy one for me venturing out again on the data collection trail to various new places, from Benin to Tajikistan, and many places in between (and not in between!). But to kick us off for the New Year here is a guest blog written by Rachel on her last trip of 2012, to Angola.

Angola, a former Portuguese slave colony situated on the West Coast of Africa was wracked by a brutal civil war following independence in 1975. Now, after 10 years of peace, it is Africa’s third biggest economy after South Africa and Nigeria and, thanks to a booming oil and diamond trade, one of the world’s fastest growing economies. However, an estimated two thirds of the population of the capital city, Luanda, live on less than $2 USD a day, reports of corruption are rife and the country was recently rated 148 out of 187 countries on the UNDP’s Human Development index. Expatriates report a dusty, gridlocked city with an eye-wateringly elevated cost of living (In 2008 and 2009 Luanda topped ECA’s Cost of Living survey as the most expensive city for expatriates) and the Portuguese, in an unusual turn of fate, today see investment from their former colony as a potential way out of their debt mountain.

The entrance to the bay

The entrance to the bay, Luanda

As wanderingmark commented a few weeks ago, the first (and most complicated) part of arranging a trip to Angola was obtaining a visa. After several e-mail exchanges with both the Embassy and the company in Angola writing my letter of invitation, I eventually had enough bits of paper to apply for the appropriate visa. Embassies are always very strict about opening hours and the Angolan Embassy is no exception. As a result of this and the 15 working days required to process the visa, let’s just say I wouldn’t try and book a last minute trip!

Having finally succeeded in organising my visit to Luanda to collect prices, opening my Bradt guidebook on the plane I was pleased to find a reference to ECA: the author was using our data to emphasise the fact that Luanda is an incredibly expensive place to live. This surprises many people; how can a city of an estimated 6 million people in a developing country be more expensive than London, New York or Hong Kong, especially when two thirds of the city’s population lives on less than two US dollars a day? In reality there are a number of factors behind why Luanda has such a high cost of living for expats, including: a severely damaged infrastructure following decades of civil war making it difficult for supplies to get through, a high level of bureaucracy and administration making importing goods a costly and lengthy business, high taxes in a corrupt system, high running costs of backup generators in supermarkets and the commodity boom in recent years leading to considerable currency appreciations in commodity-exporting markets such as Angola.

Knowing all this, I was expecting it to be expensive and I was not disappointed. As all security advice suggests not wandering around in the dark, I ate at my hotel and chose the cheapest thing possible; spaghetti bolognaise and a cola. Without wine, a dessert or any form of vegetables, the bill came to $44 USD. It was quite an experience though; to my amusement, my humble cola was served from an ice bucket and every so often a pristinely attired waiter would come up, check the level of my drink and solemnly top it up from the 330ml can, as carefully as if it were the finest Chateauneuf du Pape! And before you think I was just staying in a really nice hotel, prices in other places were just as high – a meal from a recently opened KFC cost around $16 (in the US it’s around $5) and even just a small beer in a bar costs around $7.50 USD. Most frustrating is that, despite costing so much more, the quality of goods is similar or inferior to other parts of the world; my $44 USD spaghetti bolognaise was average at best. Groceries are equally expensive and while most items are available if you search hard, the quality is sometimes poor.

View of the city from my hotel room - see all the containers on the left, maybe waiting to clear customs?

View of the city from my hotel room

In Luanda, the polarisation between rich and poor is the most extreme and apparent that I’ve ever seen. On the Ilha (the island-like peninsula where many of the best restaurants are to be found), expensive beachside bars and restaurants lie side by side with slums and expatriates are advised not to walk between them. Outside the expensive supermarkets stocked with imported goods, street sellers walk with their wares balanced on their head, selling all kinds of random objects. It can make quite a picture; I saw one woman, baby strapped to her back, with no fewer than six garden chairs balanced on her head, calmly picking her way along a potholed road, chatting to her friend who had a laundry basket filled with cleaning products balanced on hers.

Travelling between my hotel and the Belas Shopping centre in the affluent suburb of Luanda Sul involved several hours in a taxi. The road runs along the coast, with high hills to the left upon which are situated some of the musseques (slums), where much of the population lives. Tiny little shanty houses, made out of sheets of metal and plastic, perch on top of the hills and piles upon piles of refuse stretch down to the edge of the road. It was quite a shock then to emerge into the Belas shopping mall, with its Western chains, big supermarket and cinema complex. It’s by no means exactly the same as the malls you find in more developed parts of the world but you can at least get (most of) what you need here – at least you can so long as there is no power outage, a common problem in Angola, and an issue I experienced on my arrival at the centre. Luckily, 15 minutes later the power came back on and normal service was resumed so I didn’t have to do another 2-hour $100 cab ride to come back again the next day.

View of the port from my hotel room

View of the port, Luanda

It’s not just expats or foreign investors that can afford to pay the high prices though; some Angolans are very, very wealthy. In today’s oil-driven world, a country rich in natural resources of oil and diamonds and recently recovering from a civil war is a good opportunity for investors. According to my guidebook, Angola is the world’s fifth largest diamond exporter and this generates approximately $1 billion USD for the state. As for oil, their main commodity, according to the International Energy Agency Angola is in the top 20 countries with proven oil reserves and income from oil accounts for around 85% of the country’s GDP. Wealthy Angolans have even started buying holiday homes in Portugal – somewhat of a role reversal for their former colony.

The disparity between rich and poor does lead to security issues however; muggings are common and foreign visitors to the city are warned not to walk alone in certain areas for fear of attack. Thefts from slow moving cars are also very common, as well as road rage incidents. I found the security issue to be one of the most frustrating and claustrophobic aspects of the city; waiting an hour for a taxi and then spending an hour in traffic to go somewhere I could have, in safer conditions, walked in half an hour.

The infrastructure in Luanda is poor to non-existent and the only way to get around is by car (preferably chauffeured, air-conditioned and lockable). However, the sheer quantity of vehicles on the road means that popular routes often experience gridlock and in rush hour it can take two hours to cover two kilometres. In addition, many cars are old and in poor condition so unable to cope with the challenges of potholes, roads in poor repair and the heat, so break-downs are frequent, with the broken-down car remaining in the carriageway and other cars simply diverting round it, like a stream around a rock (Needless to say there’s no such thing as lane discipline). This means that even short journeys (distance wise) can take several hours to complete. The suburb of Luanda Sul is very popular with expats and many shops, restaurants and housing compounds can be found here, as well as the International school and the Belas Shopping Centre I mentioned earlier. Unfortunately, those who choose to live here and work in the centre face a long commute – with many forced to get on the road at 5am in an attempt to beat the traffic and get to the office on time.

Angola is also, according to my guidebook, home to many wondrous sights of nature. Most famous for the endangered Giant Sable Antelope (which gives their football team its name – Palancas Negras) there are reportedly some outstanding areas of natural beauty. I just wish that time and resources had allowed me the chance to see them.

The Marginal

The Marginal, a sea-front pedestrianised area popular with expat joggers

Arriving at the airport on the way home, I saw first-hand just how important the petroleum industry is to Angola. On the direct flight to London, most of my travelling companions were from British oil companies and judging from their familiarity with the airport and the staff, this was a trip they did often. From their conversations some were managers who came out occasionally while others worked on the rigs on three week rotations. It was quite incongruous, in a dusty African airport, to hear a variety of British accents- from Liverpool, Manchester, Glasgow – turning the air well and truly blue with their delight at going home again.

Like the diamonds it exports, Angola has many facets. I’m sure that the Luanda I saw was different for me than it is for the expats on the rigs, than it is for expatriates living in the city itself, than it is to wealthy locals in the high glass tower blocks and definitely than it is for the children I saw playing naked in the river. Emerging from the ashes of the civil war, with widespread poverty and an almost dictatorial political regime, Angola has a long way to go but maybe one day will realise her potential and turn out to be more than just a diamond in the rough.

Rachel is part of ECA International’s International Data Research team. She travels the world regularly, capturing price data for goods and services to assist with cost of living comparisons around the world.

About wanderingmark

World traveller, researcher, photographer, collector of interesting facts and cost of living data research for ECA International (www.eca-international.com).
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2 Responses to Guest blog: Luanda – why so expensive?

  1. Fascinating article Rachel. A friend of mine lived in Luanda for a year for work and was accompanied by bodyguards the entire time. He said it was very claustraphobic too. I don’t suppose the two-tier feel particularly promotes good relations between the ex-pats and locals. Looking forward to your next post!

  2. Pingback: Stuck in traffic in Angola’s expensive capital | wanderingmark

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