Rein in bad dealers to make essential goods and drugs affordable to all

Thursday January 20 2022
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Rising prices of cooking oil, energy and other imported goods are straining low income and vulnerable households’ budgets already struggling to recover from effects of Covid-19 pandemic.

A minisurvey by Rwanda Today shows the cost of essential imported products is going up. Already, the cost of cooking gas, which was expected to drop is still high as some retailers claim that the recent government to reduce the retail price was done without consultation. There was also a blame game with importers of cooking gas accusing retailers of raising the prices without justification.

Ministry of Trade and Industry and Rwanda Utilities Regulatory Board ( Rura) have tried to stop retailers from inflating prices in vain. There is also an issue of increasing drug prices of Covid-19 related medication that is not covered by basic health insurance.

But price shocks are a big problem that cannot be overlooked. For one thing, any slight price increment hurts most those at the bottom of the pyramid who are already living on the edge, sometimes without a stable source of income.

And since the most vulnerable in our society are net consumers and retailers of basic commodities, an increase in prices inevitably hurt most the poor urban dwellers and landless rural residents. Studies suggest that the poor spend between 60 percent and 80 percent of their income on food on average.

Among the poorest of the poor, many are net consumers of food. For them, any price increment has a huge impact.


It is important that vulnerable households do not have to choose between food and other essential products. Yet unchecked price increments of basic items means many families have to ration or choose what they can afford. Sometimes, they do not have a choice at all but go without a meal.

The prolonged Covid-19 pandemic has hit the most vulnerable in our society, and its consequences require responses that go far beyond the health sector, including measures to protect people from falling into poverty.

With significantly limited access to sources of income, there is a real risk that many may fall back into extreme poverty as a result of shocks like Covid-19.

Prices, whether high or low, seem like a double-edged sword: They hurt either consumers or producers. It beats logic to produce goods that are beyond reach for the would be end users. It is against those backdrops that policy makers should go back to the drawing board to protect consumers from exploitation.

There is a need for market interventions that enable both poor consumers and producers to cope in periods of price fluctuations.

Poverty will increase unless the government proactively protects the most vulnerable from price shocks. It is the responsibility of the government to rein in dealers and exporters who have taken advantage of the pandemic to hoard goods and medicines so as to trigger high demand that result high prices.