When I heard that Mercer Consulting had published its 2011 “Cost of Living Survey,” I thought for sure that either New York City or D.C. had made it in at least the top twenty.  I think that most Americans who have tried to rent or buy property in either city (myself included) would agree; my little one bedroom apartment in D.C. costs the same as a nice house in Texas.

Needless to say, I was surprised when I saw the rankings.  New York City did make the list, but it was ranked as #32 and was the only city in the U.S. to break the top fifty.  I was even more surprised, though, when I saw the world’s #1 most expensive city.

According to the list, Luanda, Angola, takes the cake (a very expensive cake).  I wanted to know why a city in sub-Saharan Africa ranked above places like Tokyo (#2), Moscow (#4), and Osaka (#6).  I’ve been to Tokyo, Moscow, and Osaka, and they are indeed expensive.  I remember buying a “cheap” lunch at a Tokyo version of 7-Eleven for what a nice lunch at a swanky D.C. bistro would cost.

After doing some research, I found out why.  According to a February 2011 Economist article, while the high prices in Luanda are slightly related to the country’s oil revenues (Angola is sub-Saharan Africa’s second largest oil producer), overall they are a byproduct of the country’s experience with limited supplies during the civil war there that ended in 2002.  Apparently local retailers enjoyed being able to charge exorbitant rates so much that, even after the civil war ended and supplies became less scarce, they kept the prices the same as when the country was at war.

After dealing with expensive real estate prices in D.C., I was shellshocked to read that an apartment in Luanda can cost between $10,000 to $15,000 to rent and over a million to purchase.  The Economist article also told the story of a Frenchman who was forced to pay $100 for a melon (one single, normal melon).  He was so angry that he took a picture of the melon and marched that, along with the receipt, to a court and promptly sued the store.  It was too bad for him though–the judge dismissed the case because he had eaten the melon, and therefore the original evidence was gone.  Literally.

So, if you’re planning a trip to Angola, you might want to check out the rural areas (which are way cheaper).  And if you do make it to Luanda, you might want to take some extra currency.