The rise in prices has been alarming where the inflation increased by 20.7% in urban areas in January 2023 while the country had registered an increase by 21.6% in December 2022.
The rise in January 2023 was mainly attributed to the prices of food and non-alcoholic beverages which increased by 41%. Housing, water, electricity, gas and other fuels increased by 8.3 percent on annual basis and increased by 0.1 percent on monthly basis while transport increased by 12.6 percent on annual basis and increased by 0.5 percent on monthly basis.
Addressing participants of the second day of the National Dialogue Council, Dr. Ngirente expressed optimism that prices will continue to fall in this year.
“I would like to reassure Rwandans that we did not forget them. The government did not ignore Rwandans’ concerns in this situation,” he said.
Premier Ngirente explained that the government has done a lot and subsidized prices in different ways.
“Hadn’t it been the subsidies, the current prices would have doubled. Even the current state is a result of the government’s great intervention,” he noted.
Dr. Ngirente disclosed that petroleum products were also subsidized.
“The prices would have soared further. Possibly, they could have doubled of increased three times, hadn’t it been the subsidy,” he said.
The major drivers for inflation include low agricultural produce amidst increased cost of growing crops. For instance, the prices of agro-inputs increased two times.
The latter pushes farmers to sell their produce at higher prices to prevent losses.
The second reason is the increase in prices of petroleum products which affected transport.
The issues are also related to the war between Russia and Ukraine and the economic recovery from effects of COVID-19.
Premier Ngirente said that the subsidy for petroleum products slightly reduced the cost of transport and expressed optimism that the recent subsidy in the Agriculture Season A is expected to increase produce and result in prices’ drop.
“Considering the agricultural yields in the Season A, we are optimistic that maize produce doubled as is the case for Irish potatoes. Beans’ produce decreased slightly due to experienced drought in Southern Province and part of Eastern Province,” he noted.
“As a result, the price of maize has fallen from Rwf800 to Rwf400. This means, the prices for other crops including Irish potatoes will continue to drop,” added Dr. Ngirente.