Economists have pointed out some factors that should come into play for the prices of essential commodities to go down. The country is experiencing a rise in prices of commodities like cooking oil, soap and sugar. It is a predicament shared by other countries within the region, at least on some of the commodities. The Ministry of Trade and Industry clarified that the prices did not just shoot up suddenly, but rather, they have been increasing steadily over the last two years due to the disruptions in the food supply chain caused by the Covid-19 pandemic. The ministry added that shipment costs also increased, something that has affected prices of imported goods. In a recent interview, Beata Habyarimana, the Minister for Trade and Industry noted that a 50-kilogramme sack of imported sugar which used to cost Rwf51,000, is costing about Rwf63,000, an increase of over 23 percent. A 20-litre gallon of cooking oil that would cost Rwf40,000, now costs over Rwf48,600, representing over 21 percent increase. For soap, she said that a carton (containing 12 bars of soap), increased from Rwf8,000 to Rwf9,300, an increase of 16 per cent. The New Times talked to economists, asking them about their opinion concerning when the prices may go down, and what factors should play out for that to be achieved. Peter Kalimba, a lecturer of economics at the University of Kigali noted that the price situation can improve in the coming months, if the foreign countries from which Rwanda imports step up their production to how it used to be. Here, for instance, he noted that some countries from which Rwanda gets sugar are currently carrying out repairs on their factories and this has reduced production. “When they finish maintaining their machines, the production is expected to increase, the supply chain will improve, and the prices will go low,” he noted. However, he highlighted that the Russia-Ukraine war may affect prices of some specific products, and thus, a specific solution will need to be found. He gave an example of wheat and agricultural fertilisers which have always been imported from Russia, a country that is currently under sanctions that affect its exportation. “The prices of such products are expected to rise in the next few months. Rwanda should try to get alternative supply sources to deal with this challenge,” he noted. It has been reported that Rwanda has already started to look for alternative sources of wheat imports. Before the sanctions, Rwanda heavily relied on Russia for wheat and fertiliser imports with at least 64 per cent of the wheat that the country uses coming from the Eastern European country. The country is also weighing other options, particularly encouraging more bakeries to blend wheat with tubers in the making of bread. Herman Musahara, a local economist who is an Associate Professor and the Director of National University of Rwanda’s Consultancy Bureau agreed with the Ministry of Trade and Industries that the current price increases have been fuelled by Covid-19 to some extent, but expressed optimism that situation will be getting better as nations recover from the economic impact of the pandemic. He noted that there are a number of factors that can improve the price situation in the country in the coming months, for example good local agricultural harvests as well as the government stepping in to subsidize some goods. He also weighed in on how the Russia-Ukraine war may affect the prices of some commodities like wheat. “If this Russia-Ukraine war continues, the prices of commodities like wheat will go high,” he said. In 2021, Russia was the top wheat exporter as it shipped 32.9 million tonnes of wheat, equivalent to 18 per cent of global shipments, according to the UN Food and Agriculture Organisation.
