East African Business Week (Kampala)
Bosco Hitimana
12 May 2008
Kigali — Despite increased production of foodstuffs in Rwanda, the urban population is faced with soaring prices partly fueled by chaos in the internal distribution management.
According to a mini market survey East African Business Week carried out in some wholesale and retail shops and markets in Kigali city last week, since January, wholesale and retail prices of locally made and imported commodities have been increasing.
The survey showed that prices of basic and highly consumed foods like maize flour, cassava, beans, rice, irish potatoes, cooking oil, ground nuts, bananas, sugar, tomatoe sauce and beef, have been increasing since January up to date.
The respondents said prices of locally supplied fresh foods like Irish potatoes, bananas, cassava, and dry ones like beans, groundnuts and peas have seen an increase despite high production in rural Rwanda.
They, however, blamed the internal distribution management of foodstuffs to Rwanda's capital and its suburbs caused by the monopoly by some government supported cooperatives for the looming crisis.
The cooperatives are accused of buying the produce from farmers at low prices and sell at higher prices in the capital, Kigali. This is also linked with allegations of buying in large quantities and selling when the prices shoot up.
The cooperatives have also been accused of causing speculation on the shortage of food in the country.
They are also accused of putting a total ban on farmers who wish to sell their produce to the buyers of their choice.
This has generated a cycle of monopoly in the locally produced foodstuff and subsequently pushing up food prices.
"The issue should be looked at in details rather than the way it is to day," a business man said in an interview with East African Business Week in Kigali. The distraught business man called for urgent government intervention.
According to the survey, a 50kg bag of rice has increased from Rwf25,000 in January to Rwf30,000 at wholesale. This has hiked 1kg of imported rice from Rwf500 to Rwf650 in the same period.
In addition, a 50kg bag of sugar moved up from Rwf25,000($45.4) to Rwf30,000 ($54.5) increasing the price per kilogramme from Rwf580 ($0.09) to Rwf800 ($1.4). A bag of maize flour has been hiked from Rwf11, 500($20.9) to Rwf12,000($21). A carton of locally produced tomato sauce increased from Rwf10,000($18) to Rwf18,000($32.7) at wholesale. A kilogramme of bananas which used to sell at Rwf80 ($0.01) has moved to Rwf100 ($0.18) and keeps changing. Beans -highly consumed in Rwanda increased from Rwf250 ($0.4) to Rwf300 ($0.5) a kilogramme.
A liter of imported cooking oil also moved from Rwf700 to Rwf1300. A kilogramme of G-nuts shot up from Rwf400 ($0.7) to Rwf580 ($1.0). Salt also moved from Rwf100 ($0.18) to Frw240 ($0.4) per kilogramme.
The inflation from January to March, had hit 10%. During February, the Consumer Prices Index (CPI) was 151.7 compared to 149 in January. This month, the overall increase in prices is varying between 2% to 15%.
Rwanda's state minister in charge of industry and investment promotion Mr. Vincent Karega, told East African Business Week said last week, "We are helping the farmers to understand the input and the price and play a role by reducing the number of intermediaries between them and the consumer."
"We are also going to support the consumer organisations so that they play role in highlighting where the problems are. The problem is speculation and monopoly in some sectors," Karega added.
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