On February 28, the United States and Israel launched hundreds of airstrikes on Iran, triggering retaliatory attacks across the Middle East. Iran closed the Strait of Hormuz, through which roughly a fifth of the world’s seaborne oil flows, in what has been described as the largest disruption to global oil supply since the 1970s. ALSO READ: Experts share tips on ways to navigate rising prices For Rwanda, which imports every litre of fuel it consumes, this is a serious blow. But it has not broken the economy, because the government acted quickly. According to Rwanda Utilities Regulatory Authority (RURA), petrol now costs Rwf2,938 per litre, up 48 percent in six weeks. Diesel has been held at Rwf2,205 through deliberate government intervention. Transport fares have been revised upward. ALSO READ: The US-Iran war’s hidden tax on Rwandans In Kigali’s markets, watermelons from Tanzania and Uganda have doubled in price, cassava flour has doubled at wholesale level, imported fruits are up 50 to 80 percent, and local maize flour has risen by about 20 percent, according to vendors in Nyabugogo and Gisimenti. ALSO READ: US-Israel-Iran war reaches day 46: Why Africa pays the price These prices are rising not because Rwandans are spending more, but because it has become significantly more expensive to bring goods into the country. Shipping routes have been redirected around the Cape of Good Hope, adding weeks to transit times, while diesel used to power trucks from Mombasa and Dar es Salaam has become more expensive. What the government did right Diesel subsidy. RURA stated that diesel prices were held steady “in order to maintain support for the public transport of goods and people as well as overall economic activities.” Diesel powers the trucks and farming equipment that move food across the country. This single decision has likely prevented a much worse inflation outcome. ALSO READ: How could the US-Israel war on Iran affect Rwanda? Interest rate increase. On February 18, the National Bank of Rwanda (BNR) raised its policy rate by 50 basis points to 7.25 percent. Governor Soraya Hakuziyaremye said the move aimed at “limiting second-round effects of recent price increases.” With headline inflation at 9.2 percent in February, according to NISR, the goal is to signal that inflation is being managed so that businesses do not raise prices pre-emptively. Strategic borrowing. According to the Ministry of Finance (MINECOFIN), Rwanda has secured a €213 million (approximately Rwf370 billion) blended finance facility with a 15-year maturity and a six-year grace period to support infrastructure, health, education, agriculture, and social protection. In March, Fitch Ratings affirmed Rwanda’s B+ credit rating and revised the outlook to Stable. Protecting farmers Roughly one-third of global seaborne fertiliser trade passes through the Strait of Hormuz, and urea prices have surged 30 to 50 percent since the war began. Rwanda’s advantage lies in the Smart Nkunganire System (SNS), a digital platform with over 1.5 million users. It tracks fertiliser allocations across all 30 districts and helps redirect supply before shortages occur. The government is also diversifying suppliers and expanding locally blended alternatives. Protecting households For lower-income families, even small price increases are painful. Rwanda’s Vision 2020 Umurenge Programme (VUP) already provides cash transfers to the most vulnerable households. Temporarily scaling up these transfers would place purchasing power directly into the hands of those who need it most. The US–Iran ceasefire expires on April 21, with no deal in sight and 230 loaded oil tankers waiting inside the Gulf. Even if the strait reopened tomorrow, there are still mines to clear and months of backlog to unwind. As Prime Minister Justin Nsengiyumva said on April 3, the crisis “will affect nearly every Rwandan.” Rwanda did not choose this war. But what it does have—a credible central bank, disciplined public finances, digital agricultural systems, and social protection that reaches the poorest—is exactly what a country needs to weather a storm like this. Many countries with far greater resources are managing this crisis less effectively. Rwanda’s response is not perfect, but it is fast, coordinated, and grounded in experience. That matters. The writer is an independent economic researcher based in Kigali.
