High food prices hurting, despite increases production

A market in Kigali, Rwanda’s capital: Despite availability of food, it costs higher

A market in Kigali, Rwanda’s capital: Despite availability of food, it costs higher

 Rwanda is experiencing a slight increase in food prices and other consumer commodities, the national institute of statistics (RNIS) has announced.  Overall Rwanda annual prices increased by 4.5%, but decreased by 0.2% on a monthly basis, the RNIS.

In June 2014, “food and nonalcoholic beverages”, education, and restaurants and hotels rose by 1.9%, 7.1% and 7.8% year on year, respectively, except for vegetables and transport that dropped by 0.5% and 3.0% respectively.

Rwanda’s main dish is Irish potatoes. Prices for Irish have now shot up to Rwf250 from Rwf160 per kilogramme in Kigali City over the last six months. Bad yields for the last season, bad weather and external demand shock are some of the attributes. Traders say South Sudan is consuming a lot of food from the region, especially Irish and cereals.

The data also indicate that price for “local goods” increased by 2.1% on annual change with a monthly decline of 0.1%. However, prices of imported products decreased by 0.4% on annual change, but exponentially decline by 1.8% last month.

On annual average, RNIS noted, prices in urban areas increased by 1.4%, despite having decline by 0.5 % last month.

However, prices in the rural areas increased reasonably higher than in urban areas. Prices there shot up by 6.1% on an annual basis, and was stable on a monthly basis.  Urban Index was calculated based on more than 1000 products in twelve urban centers of Rwanda.

And the increase for the urban market was mainly due to the rising prices of food and non-alcoholic beverages, education and hospitality.

The underlying inflation rate (excluding fresh food and energy) decreased by 0.6% when compared to May 2014 and increased by 2.0% when compared to June 2013.

The annual average underlying inflation rate is 3.3%.

The government has just released its budget funds, and economists say a move that expected to improve the economy positively due to expected increase in aggregated expenditure.

Government is Rwanda’s biggest spender on services. While, Rwanda’s economy grew by 7.4 % in the first quarter of 2014, compared to 4.7% registered in the same period in 2013, the services sector contributed 48% of the total GDP.

Agriculture sector contributed 1.7% to the overall GDP growth and grew by only 5%, despite food prices fluctuating sharply.

Source: KT Press

(www.ktpress.rw)

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Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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