Statista reports that in 2024, Addis Ababa, Ethiopia, is anticipated to be the most costly city in Africa regarding consumer goods, boasting an index score of 46.7.
The average living expenses in Addis Ababa amount to $1,103, which is 4.8 times greater than the typical salary.
Addis Ababa, serving as the capital of Ethiopia, is the largest city in the nation, with a population of approximately 5.23 million. Although it ranks 6957th globally for livability (within the top 75%), it is seen as the premier city to reside in Ethiopia.
However, with a median income after taxes being $231, covering only a mere 0.2 months’ worth of living expenses, it is apparent that the cost of living presents a major obstacle.
What makes living in Addis Ababa so costly?
1. Civil war
The civil conflict in Ethiopia has resulted in major issues, such as rising expenses for housing, food, healthcare, and education, as well as shortages of essential goods.
The Tigray conflict, which occurred from November 3, 2020, to November 3, 2022, had a profound effect on the nation’s economy.
Many individuals, especially those from rural areas, have had to relocate due to limited transportation options caused by fuel shortages.
2. Ethiopia’s Landlocked Status
Being a landlocked country means all imported goods must pass through neighboring nations like Djibouti to reach Ethiopian markets.
This situation raises consumer prices by escalating transportation costs, particularly for bulk products.
3. Import Restrictions
Trade barriers, tariffs, and currency regulations can lead to higher prices for products.
Certain items face import limitations, including furniture, fragrances, cosmetics, synthetic flowers, hats, jewelry, carpets, umbrellas, timepieces, soaps, fireworks, both human and synthetic hair, and bags and wallets. Although intended to safeguard local industries, these measures often have the contrary effect.
Additionally, other cities in Africa known for their high living costs include Harare in Zimbabwe, Dakar in Senegal, and Cape Town in South Africa.