What to Expect from new transport fares

On 1 March 2024 at 12:12

In the coming days, transportation fares in Rwanda are poised to undergo significant changes. The new fares, set to replace those that have been in effect for six years since 2018, are about to be introduced.

In 2020, a fare revision was made, but the government decided to offer a subsidy to citizens to mitigate the economic impacts of the Covid-19 pandemic. From that year, although a revised fare was applied, the state introduced a financial subsidy allowing passengers to continue benefiting from the 2018 fares.

At that time, travelers making inter-provincial journeys were allowed to continue paying the rates set in 2018, based on Rwf21 per kilometer for inter-provincial trips and Rwf22 per kilometer for movements within the city of Kigali.

Currently, the government subsidizes between 40% and 50% of the travel cost for anyone using public transport, whether in Kigali or in the provinces.

Today, as the national economy and that of individuals stabilize, there is a plan to revise these fares that have not changed for six years. One of the main expectations is the removal of the government subsidy for public transport, although it will be redirected towards other initiatives aimed at improving access to quality transportation services, such as the acquisition of 200 new buses to supplement the existing network in the city of Kigali.

End of internet charging in buses for users

In the formulation of transportation fares, the cost of internet access was also taken into account. Initially, the idea was that each bus would be equipped with an internet connection to enhance passengers’ travel experience. However, it turned out that the service was not as effective as expected.

Previously, in the price of a ticket for a journey within the city of Kigali, 10 Frw were allocated for the internet. Given that this internet connection did not work properly most of the time, in the new fares, citizens will no longer be charged for this service, following the suspension of the internet program in buses.

For example, a passenger traveling from Remera to downtown paid Rwf220 for their journey. The actual cost of transport was therefore Rwf210, with the remaining Rwf10 intended for the internet.

Government subsidy to be scrapped

Given the government subsidy that covered between 40% and 50% of the travel cost, the passenger traveling to Remera benefited from financial aid varying between 90 Frw and 100 Frw for this journey.

With the recent reforms, this burden will now fall on the citizen, which could increase the fare for a trip to Remera from Rwf220 to more than Rwf300.

This increase could represent up to 50% of the fare initially paid by the passenger, depending on the evolution of fuel prices and the general economic situation.

As a result, transportation fares, both within the city of Kigali and between provinces, could see a similar rise, increasing by about 50% compared to current rates.

Gasoline prices to be considered while setting fares

When the subsidy was introduced in October 2020, the price of diesel, used by the majority of public transport vehicles, was Rwf943 per liter. Today, this price has climbed to Rwf1,632.

This means that since the subsidy was introduced in 2020 until today, the price of diesel has increased by about 74%.

In October 2020, when these fares were applied, a barrel of oil cost $39 on the international market, while today, it has reached $78.

Subsidy is reallocation

Despite government announcements about the removal of the subsidy (Nkunganire), a deeper analysis reveals that it will actually be transferred to other initiatives. This follows the government’s recent decision to acquire buses intended to improve the public transport service.

Transport operators, often facing financial difficulties and reluctant to invest in new vehicles, will now see the government facilitate the purchase of these vehicles. This measure aims to solve the problem of long queues at bus stops.

A study showed that the city of Kigali requires up to 300 large buses. In a first phase, the government purchased 200, of which 100 are already operational and have begun to improve the service. Each bus costs more than Rwf150 million. The remaining 100 buses are expected to arrive shortly.

Since 2020, the government has spent more than Rwf91 billion to subsidize passenger transport as indicated recently by the Prime Minister Dr. Edouard Ngirente.

A passenger interviewed by IGIHE expressed a preference for a paid but faster service, avoiding long waits, over a free or cheap but less efficient service.

Recent reforms in the transportation sector in Kigali have eliminated the monopoly system, where only three companies were allowed to operate, opening the market to any company, even those owning just one vehicle.

This has enabled ten companies, including Yahoo and Volcano which previously operated in the provinces, to serve different routes of Kigali. Moreover, in areas less served by carriers, they are now allowed to set their fares, subject to approval by RURA to prevent overcharging passengers.