As the war in Ukraine pushes food, fuel and fertiliser prices toward record high levels, it is important to ensure that small-scale farmers can continue to produce enough to feed their families and communities while reducing the threat to future harvests.
The current global price shock comes at a time when many vulnerable people are already grappling with the impacts of climate change and the Covid-19 pandemic, and facing the risk of being pushed further into poverty and hunger.
Recently, the central bank’s rate-setting Monetary Policy Committee decided to maintain its rate at five percent, unchanged from the past quarter, to contain inflation and support economic recovery amid heightened risks that include rising domestic and global inflation.
In particular, the recent increase in inflation, partly linked to the negative effect of the Russia-Ukraine war, is likely to constrain private consumption, according to the central bank. The shortages and higher costs of some imported inputs, as well as unfavorable weather conditions that affected
Agriculture Season A, are expected to have a negative effect on this year's economic growth, which will remain strong but lower than the 7.2 percent initially projected, the central bank added. It is against this background that this week’s announcement by Prime Minister Édouard Ngirente that the government has made available more funding and reaffirming its commitment to protect the most vulnerable is timely and a step in the right direction.
The government says micro-loans will be made available to special categories of people, including women, the youth and people living with disability, who will access funds without having to provide
As Mr Ngirente rightly put it, while the government cannot control or stop prices from rising, it can reduce the burden on consumers. Indeed, research shows that vulnerable rural people are usually hit harder by the increasing prices of essential agricultural inputs such as fertilisers, food and transport.
Every effort must be made to support the private sector to fully recover from the pandemic. This will help create jobs in the economy to curb rising unemployment particularly among the youth. The unemployment rate is higher among youth aged 16 years to 30 years, at 29.8 percent compared with 19.3 percent among adults aged 31 years and above, according to figures by the National Institute of Statistics.
Part of the economic support should ease access to funding and address the cost for the private sector, which makes it difficult for businesses to repay loans. There are clear signs that the economy is on a rebound. However every effort must be made to ensure that growth is sustained, and more Rwandans benefit from it in the form of increased economic opportunities.