Nairobi among most expensive cities to live in

It is more expensive to live in Nairobi than in Africa’s relatively developed cities of Cairo, Egypt, and Johannesburg, South Africa, a study conducted late last year shows.

This is despite Nairobi workers taking home less in wages when compared to their peers in the two cities. According to a survey by Swiss global financial services company UBS, Nairobi was a place above Cairo and three places above Johannesburg in the ranking of price levels.

Because residents of Nairobi earned dismal wages they struggled to pay for basic foodstuffs such as bread, rice and chicken, according to the report that compared purchasing power in 71 cities across the globe.

A worker in Nairobi received a nominal hourly gross salary of $6.5 (Sh665) in 2015 for manager position in service and manufacturing sectors. This is in comparison to his counterpart in Cairo who received a nominal hourly wage of $8.2 (about Sh839) while that in Johannesburg earned $32.8 (about Sh3,355).

Nairobi had one of the lowest domestic purchasing power when compared to 70 other cities. The 16th edition of Prices and Earnings study, also found that residents of Nairobi have to work 44 minutes to buy a kilogramme of bread, 62 minutes to get a kilogramme of rice and 468 hours (20 days) to buy Apple’s iPhone 6.

“Workers in Hong Kong only have to work on average nine minutes to buy a Big Mac, while workers in Nairobi have to work almost three hours,” noted the report which saw New York City emerge as the most expensive city to live in. Big Mac is a type of hamburger made by international fast-food company McDonalds.

Nairobi’s domestic purchasing power was superior only to Indonesia’s city of Jakarta. For example, earners in Luxemburg City, the city with the highest domestic purchasing power according to the survey, had a purchasing power that was 11 times greater than earners in Nairobi.

“Workers in cities with high relative gross salaries (Zurich, Geneva and Luxembourg) receive pay that is on average 19 times those in Nairobi, Jakarta and Kiev,” reads the report in part.

Excise duty Act

The report also found that workers in cities with high relative gross salaries (Zurich, Geneva and Luxembourg) receive pay that is on average 19 times those in Nairobi, Jakarta and Kiev.

The report comes at a time when the Kenya National Bureau of Statistics (KNBS) released data on Consumer Price Indices (CPI) and inflation for the month of December.

There were great changes in the broad commodity categories of Food & Non-alcoholic Beverages as well as Alcoholic Beverages, Tobacco & Narcotics with the former increasing by 1.23 percent between the months of November and December 2015 and the latter by 11.46 percent.

There was aggregate increase in various food items such as avocado, tomatoes which outweighed the decrease, thus the high price in food and non-alcoholic beverages.

The enforcement of the Excise duty Act pushed up the prices of cigarettes and beer in the month of December.