Prices soar in Rwanda as Burundi’s ban on food exports bites

BURUNDI – Burundi’s ban on food exports to Rwanda has sent prices in Kigali to a record high this year.

The two countries’ worsening diplomatic relations led to the closure at the end of July of the border by the Burundian government, which also imposed export restrictions on its neighbour, citing domestic food security concerns.

As a result, food supplies are now going into Rwanda from Burundi through the black market.

“The few food imports from Burundi are coming through illegal ways and are extremely expensive,” said Silas Sabiiti, a grocery trader at Kimironko food market in Kigali.

“The shortage is apparent here and this is what has pushed up the prices. The demand for fruit from Burundi has always been high because of its renowned quality,” he added.

Agricultural and livestock products are the major commodities traded between the two neighbouring countries. Burundi largely exports fruits and vegetables, palm oil and silverfish to Rwanda.

However, the cost of these commodities has more than doubled over the past three weeks after Burundi effected the ban on cross-border trade.

A kilogramme of mangoes rose from$1.25 (Rwf1,000) to more than $2.5 (Rwf2,000), and a kilo of oranges rose from $0.5 (Rwf400) to $1.25 (Rwf1,000).

Burundi is Rwanda’s second largest cross-border market after the Democratic Republic of Congo, with the two countries accounting for more than half the total formal and informal cross-border exports.

Before the political crisis broke out in Bujumbura last year — after President Pierre Nkurunziza was re-elected for a third term — Rwanda exported maize, maize flour, wheat flour, cassava flour, potatoes and milk to Burundi.

The National Bank of Rwanda’s latest statistics indicate that owing to the decline in exports to Burundi, Rwanda’s total cross-border exports within the EAC fell to $100.5 million in 2015, from $107.5 million in 2014. Cross-border exports to Burundi alone declined by 27.2 per cent.

In view of the ban on food supplies from Burundi, Rwandan consumers have turned to Uganda and Tanzania, but at a higher cost.

The overall rise in food prices will exert additional pressure on the already strained consumers.

Food prices have risen over the past four months owing to drought in some parts of the country. There has also been pressure from tougher tax measures introduced in this year’s budget.

According to the National Institute of Statistics, the July year-on-year inflation rose to 6.9 per cent from 5.5 per cent recorded in June, driven by rising food prices.

Prices for fresh produce increased by 19 per cent and 3.6 per cent on annual and monthly costs respectively.

Currently, the prices of beans, potatoes, bananas and cereals have risen yet again, after they had recorded increases between $0.03 (Rwf25) and $0.04 (Rwf35) over the past two months.

In one week, a kilogramme of Irish potatoes went up to between $0.40 (Rwf320) and $0.44 (Rwf350) from $0.3 (Rwf300).

There are fears that the trend will continue if the ban continues.

Rwanda’s Trade and Industry Ministry however downplayed the ban’s potential effect on the country.

Minister Francois Kanimba said that Burundians will be the ones to suffer more from the ban.

“I don’t think there can be severe negative implications of the Burundian ban for Rwanda because the supplies that came from there can be sourced from other countries,” he said.

August 21, 2016; http://www.theeastafrican.co.ke/business/Prices-soar-in-Rwanda-as-Burundi-ban-on-food-exports-bites-/2560-3351674-hftdc1/index.html

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