Inflation triggers higher food, fuel prices

Commodity prices in major markets around Kigali city soared in the last two moths, reflecting an increase in the cost of living with official annual inflation jumping to 4.1 percent in the month of March, up from 2.56 in the previous month. According to National Institute of Statistics of Rwanda (NISR), the rise in inflation is mainly due to the rising prices of food and non alcoholic beverages, housing, water, electricity, gas and other fuels, transport and education. A mini survey by Business Times shows that cowpeas rose from Rwf600 per kilogramme in March to Rwf700. Ground nuts increased from Rwf700 per kilogramme to Rwf900 as Irish potatoes increased from Rwf130 to Rwf170. While the price of tomatoes decreased from Rwf600 per kilo to Rwf400 on improved tomato yields, a kilogramme of bananas rose from Rwf140 to Rwf180 as Uganda, which is Rwanda’s major supplier of the food crop, cut exports. Other foodstuffs like sweet potatoes rose from Rwf200 per kilogramme from Rwf150, maize floor from Rwf350 to Rwf400, per kilogram. Cassava and yam prices have remained stable since December but sugar rose by Rwf50 to Rwf700 per kilogramme as five litres can of cooking oil increased to Rwf7000, up from Rwf6000. “For example, one kilogram of beans in March was selling at Rwf400 but has increased to Rwf450 in April,” Anita Nyirabajenzi, a market vendor at Kimironko market said. She attributed the sharp rise in commodity prices to the poor harvest brought about by bad weather. Claude Habiyambere, a market vendor said that sales have dwindled in recent months as customers cut spending due to the increase in prices. While officials acknowledged that the weather was not favourable, they largely attributed the soaring commodity prices to the rise in fuel prices, which is a result of the political turmoil in Libya and other oil exporting countries in the Middle East and North Africa. According to National Institute of Staistics of Rwanda (NISR), prices of imported products increased by 5.10 percent from 2.26 percent between March and February, which increased imported inflation. “The rise was driven by soaring international oil prices,” Diane Karusisi, the Director General of NISR said, adding that the high inflation consolidates the widening wealth gap in the country as low income earners experience the pinch more. The statistics bureau said that annual average underlying inflation rate, which excludes fresh food and energy, increased to 1.4 percent in March 2011 up from 1.3 percent in the previous month. The Minister of Trade and Commerce, Monique Nsanzabaganwa, said the skyrocketing commodity prices are due the rise in fuel prices that have increased transportation costs of consumer commodities. She however allayed fears of double digit inflation, saying that the economic stability of the country is tolerable. “We believe we will end this year without reaching a ten percent inflation rate,” Nsanzabaganwa said. Ends

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Inflation triggers higher food, fuel prices