- Report notes the average Motswana cannot maintain a respectable quality of life
- Affordability of housing, food, transport and healthcare factored in
- Botswana is ranked below Ethiopia, which has Africa’s highest cost of living
BONGANI MALUNGA
Botswana has the second highest cost of living in Africa, according to a report published by Business Insider Africa.
Compiled by European database company Numbeo, the report factored in the affordability of essential goods and services such as housing, transport, food, healthcare and education in the cost of living index.
Just below Ethiopia
Botswana is ranked below Ethiopia, which has the highest cost of living on the continent. The top 10 list is rounded up by Mozambique, the Ivory Coast, Somalia, Cameroon, Mauritius, Zimbabwe, Rwanda and Zambia in their numerical order.
Globally, Botswana is ranked 65th in terms of cost of living.
The report states that due to the country’s high cost of living, families are unable to save, invest or spend on non-essential items because of limited disposable incomes.
Rising operational costs
The report notes that this then prevents the average person from maintaining a respectable quality of life.
According to financial experts, a high cost of living environment is better suited to the elite who have the financial might to adjust to inflated expenditures while low and middle-income households are the hardest hit.
“Businesses typically face rising operational costs as their utility, rent and payroll bills rise,” the reports states. “Small and medium-sized enterprises (SMEs), which form the backbone of African economies, may struggle to thrive in such conditions.”
Inflation
As a result of a high cost of living environment, increased wage expectations inevitably increase the likelihood of inflation. The report also warns that countries with a high cost of living can scare off investors “if they perceive these expenses as eroding profitability”.
Loss of a skilled workforce has also been highlighted as a worry as the environment may force citizens to seek employment overseas or in nearby countries with cheaper living expenses.