Resilience in Rwanda: New Brief Looks at Impact of Economic Shock

On January 12, 2024, trade between Rwanda and Burundi came to a halt when the border crossing was unexpectedly closed. Food prices in Rwanda may have been expected to fluctuate more than normal as a result—both falling prices for commodities typically exported to Burundi that instead began flooding local markets and rising prices for commodities typically imported from Burundi that faced suddenly limited local supply. However, a new brief from IFPRI’s Rwanda Strategy Support Program finds little evidence of such atypical fluctuations for five major food categories, suggesting Rwanda’s food system has proven to be fairly resilient in the face of this trade shock.

The brief drew on price data from the eSoko online platform maintained by the Rwandan Ministry of Agriculture and Animal Resources. ESoko tracks prices for 106 food items in 68 markets across the country. Researchers aggregated market prices to district prices in the four districts bordering Burundi and looked at monthly price data from April 2018 to April 2024 for five main food groups: animal source foods, fruits and vegetables, legumes, fats and oils, and starchy staples.

Most districts saw downward price movements for the majority of commodities studied from October 2023 to January 2024, likely reflecting typical seasonal trends. From January to March, average prices at the national level continued to decline before stabilizing in March and April. In the surveyed districts, in contrast, two saw increasing prices between January and April and one saw increases through March and stabilization in April. The fourth experienced a relative reduction in prices. However, the brief points out, these price movements are within the typical average seen within the five-year study period.

In other words, the cessation of trade with Burundi does not appear to have impacted price volatility at the district or commodity level, at least within the first few months of the shock.

The researchers also looked more closely at several individual food items rather than just at the larger food groups: salted fish, mangoes, pineapple, and tomatoes. These food items were chosen because the data appeared to show large price fluctuations following the closing of the border. The price of all four commodities increased in early 2024, with salted fish prices rising by 30 percent in March and April.

Despite the higher fluctuations, however, the brief concludes that the border closing did not have a real impact even on these individual commodities. Seasonal price movements appeared to be a factor, and existing national trends may also have been in play. For example, mango prices tend to be volatile even at the national level, and local mango supplies were already being impacted by pest infestations.

These findings show that Rwanda’s agricultural sector has been unexpectedly resilient in the face of the potential economic shock posed by the sudden cessation of trade with Burundi. The researchers also highlight the importance of monitoring local price movements to assess the impacts of future shocks. By continuously tracking local movements, policymakers can gather near-real-time data to make better informed decisions and avert the most negative consequences to livelihoods and food security.

Sara Gustafson is a freelance communications consultant.