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African city named world's most expensive for expats

By Mark Tutton, for CNN
Luanda, Angola, has been named the world's most expensive city for expats.
Luanda, Angola, has been named the world's most expensive city for expats.
  • Luanda, Angola is the most expensive place for expats
  • Survey lists Tokyo next and N'Djamena, in Chad, as third most expensive
  • High accommodation prices are the main drivers of high costs for expats
  • A club sandwich and soda meal in Luanda costs $20, according to survey

(CNN) -- Luanda, Angola's capital, has been named the world's most expensive city for expats for the second year in a row.

According to a new survey, Tokyo is the next most expensive, with N'Djamena, in Chad, the third-most expensive city for expats.

The results are part of the Worldwide Cost of Living Survey 2011, carried out by HR consultants Mercer.

Record accommodation prices are the main driver of high living expenses for expats in African cities, according to the report.

In Luanda, renting a luxury two-bedroom unfurnished apartment costs an average of $7,000 per month, compared to $4,300 in New York, $3,345 in Shanghai, $2,456 in Rome and $1,800 in Buenos Aires.

"In Luanda, accommodation costs are very, very high," explained Mercer senior associate Nathalie Constantin-Metral.

Most expensive cities for expats
1. Luanda, Angola
2. Tokyo, Japan
3. N'Djamena, Chad
4. Moscow, Russia
5. Geneva, Switzerland
6. Osaka, Japan
7. Zurich, Switzerland
8. Singapore, Singapore
9. Hong Kong, China
10. Sao Paolo, Brazil
New survey ranks most expensive cities
  • Luanda
  • Angola
  • Chad
  • Africa

"Availability is limited and most expats are looking for accommodation in secure compounds and prices for accommodation with international standards are high," she added.

The high cost of living in Luanda and N'Djamena is also down to the fact that expats shop differently to locals. Expats tend to look for international brands they are used to at home, which have to be imported.

In recent years Angola has been attracting expats with its growing economy, driven by oil production. It produces up to 1.9 million barrels a day, with oil contributing about 85% of its GDP, according to the CIA World Factbook.

But a 27-year civil war that ended in 2002 left the country's infrastructure in ruins, meaning many goods, including food, have to be imported.

A club sandwich and soda meal costs $20.38 in Luanda, compared to $6.29 for a fast-food meal in New York and $3.57 in Shanghai.

Angola's oil reserves do at least mean that gas is cheap in Luanda -- 59 cents per liter, compared to 87 cents in New York and $1.12 in Shanghai.

Despite its oil, the vast majority of Angolans work in agriculture and more than a third live below the poverty line, according to the U.N. Development Program. Life expectancy is just 39 years.

Likewise, although Chad is benefiting from foreign investment in oil production, more than 80% of its population works in agriculture and it is one of the poorest countries in the world.

The survey covers 214 cities across five continents and compares the cost of more than 200 items in each, including housing, transport and food.

Currency prices can affect the results. All cities surveyed are measured against New York, with currency movements measured against the U.S. dollar.

However, Constantin-Metral said currency prices were not a factor in the high placings of Luanda and N'Djamena.