A spike in the cost of living has affected the majority of its citizens, especially the most vulnerable.
As a number of African countries are experiencing some form of price inflation, this is unfortunately not an isolated incident. There is an increase in transportation and energy costs for regions like Nigeria and Kenya, but Rwanda is experiencing a wide range of inflation.
Rwanda, according to the International Monetary Fund, is currently in a bind, because the country needs to adjust its monetary policies in order to combat the recession. The country’s economic trajectory, however, may be negatively impacted as a result of this.
According to the National Institute of Statistics (NISR), the economy expanded by 10% in the third quarter after growing 7.5% in the second quarter and 7.9% in the first quarter.
The Minister of Finance and Economic Planning, Uzziel Ndagijimana, said: “We had projected 6.8% this year by the end of December. But based on the performance of the three quarters, we may achieve more than 6.8%.”
Taking into account all these downside risks, we are conservative in our projections for next year. We aim for 6.2%, subject to adjustments as the global economy develops,” he said.
Rwanda’s economic recovery from the Covid-19 pandemic is threatened by the current rise in inflation.
As a matter of fact, the economic rebound was largely due to the full resurgence of the nation’s service sector, which fully resumed operations during the year. Several international meetings and conferences fueled a 17% growth in the sector.
Rwandan food prices have been increasing along with other basic amenities and the unemployment rate. These factors have hindered what should have otherwise been a strong year for a country that was on track to surpass its economic projections by 2022.