South Africa Voted Worlds Cheapest Country to Live in
Is South Africa really the cheapest country in the world to live in? A recent survey of 112 countries in the world by GOBankingRates using data from cost-of-living database, Numbeo, concluded that South Africa is the cheapest country in the world to live in or retire to.
This is according to David de Waal, CEO of Steeple, who says our position as number one on the list has a lot to do with the fact that the rand has crashed, making everything appear "dirt cheap" to foreigners.
Additionally, he says other significant costs which people in most countries don't incur were not taken into account, such as private security or higher insurance costs as a result of crime.
“South Africa has one of the world's highest GINI coefficients - which is a statistical way of describing our income inequality - so defining the expenses for an ‘average’ South African consumer is an impossible task, but we have to assume that the Numbeo figures are for a mythical middle-class South African, whose average monthly disposable salary is assumed to be R17 909, suggesting a before-tax income of about R22 000,” says De Waal.
GoBankingRates advises that it ranked countries "by four key affordability metrics":
1. Local purchasing power index.
2. Rent index, compared with New York City.
3. Groceries index, compared with New York City.
4. Consumer price index, compared with New York City - not to be confused with inflation.
The survey used rental costs as an indicator for housing expenses, and the cost of buying and owning a property is not taken into account.
Whereas the raw data may seem reasonable, De Waal says the ranking methodology of GOBankingRates is arbitrary and we as hard-pressed South Africans would find it difficult to agree with the conclusion.