Findings

This brief assessed the impacts of the Russia-Ukraine conflict on commodity prices in local markets within Rwanda and compared them to changes in global prices. The assessment found that there has been a general rise in prices of food and energy commodities in Rwanda, reflective of similar changes at the global level.

There were, however, some exceptions, such as cooking oil prices in urban areas, which declined while global prices rose. For some commodities like sugar, local prices rose more sharply than global prices, with some variations in price change patterns between rural and urban areas. Rice, sugar, cooking oil and wheat flour are basic food commodities, and the rise in prices presents cause for concern to policymakers because of the likely negative impacts on the welfare of poor households.

One of the short-term solutions is to provide targeted social protection support to the most vulnerable households facing higher food and energy prices, similar to what Rwanda implemented during the COVID-19 crisis.

In the long term, measures that facilitate more free intra-regional trade should be adopted and implemented to allow food commodity trade among countries in the continent.

In addition, boosting local food production and productivity in the long term is a sound strategy for dealing with external shocks emanating from global food markets.

Long-term investments in energy-saving products and energy efficiency improvements are also required.

The government of Rwanda should continue and intensify funding to agriculture, especially for programs that aim to increase production and productivity to be better prepared for future global shocks on domestic food prices.