In Kigali’s bustling markets and rural villages, the story of inflation is more than just rising prices—it’s about how households are coping with stagnant incomes, a weakening currency, and upcoming financial adjustments that will redefine everyday life.
Take this: the latest Consumer Price Index shows urban inflation at 5%. That means what cost 100 francs last year now costs 105. For families already struggling to make ends meet, this small number feels enormous. But the real challenge runs deeper because household incomes are not increasing at the same pace.
Stagnant wages mean that while prices climb, earnings remain unchanged. For people like Jean, a delivery driver in Kigali, or Marianne, a teacher in Butare, this means their ability to buy essential goods is shrinking. Jean spends more on fuel for his bike, and Marianne finds her grocery bill stretching her budget thinner. “It’s not just what you earn anymore; it’s what you can actually buy with it,” Jean explains.
The divide between urban and rural areas makes the situation even more complex. Urban inflation stands at 5%, while rural areas have a more modest 2.4% increase. The national average inflation rate of 3.4% may sound manageable, but it hides stark realities. Urban families feel the squeeze more acutely as the costs of transport, food, and housing soar.
And then there’s the franc. Over the past year, the Rwandan franc has lost 18% of its value against the US dollar. For a country that relies on imports for key goods—think fuel, medicines, and even some foods—this drop makes everything more expensive. Each dollar now costs 18% more in francs, and those costs are passed down to consumers.
For families, this squeeze is relentless. Imported goods have risen by 5.1%, while locally produced items are up by 5%. Basic agricultural goods, reflected in the fresh products index, have climbed 5.4%. Even though energy prices have seen a rare 0.2% decrease, the overall picture remains grim. Meat prices, for instance, have skyrocketed by 24%, milk, cheese, and eggs are up 14.7%, and transport costs have jumped an eye-watering 15.6%.
Next year, households will face yet another challenge: a 6% cut in earnings going toward pensions. While the government argues that this policy will strengthen social security systems in the long term, it’s a tough pill to swallow for many families already struggling to manage their finances. This cut means less money in hand for day-to-day expenses, forcing tough choices about what to prioritize.
For some, it might mean giving up on luxuries like dining out or new clothes. For others, it could mean cutting back on essentials like meat or transportation. “Every decision feels like a sacrifice,” Marianne says.
Behind these struggles lies a detailed picture of how inflation touches every corner of life. The National Institute of Statistics of Rwanda (NISR) collects data from over 40,000 price points, tracking 1,622 products across 12 urban centers. The numbers they gather tell the story of a nation adapting to economic shifts, from the 5.6% increase in clothing and footwear costs to the 6.5% rise in alcoholic beverages and tobacco. Even housing and utilities, which account for 21% of the urban index, have gone up by 4.4%.
Despite these challenges, the government is working to ease the burden. Policies to stabilize energy costs have brought a slight decrease in prices, and efforts to boost domestic production aim to reduce reliance on expensive imports. Economists acknowledge these efforts but emphasize the need for more robust measures. Effective monetary policies in play, but the pressure on households is immense. Inflation, currency depreciation, and policy changes like the pension cut are creating a perfect storm for many families.
Even with these pressures, Rwanda’s inflation rate of 4.7% for the year suggests relative stability compared to global trends. The core inflation rate, which excludes volatile elements like fresh food and energy, sits at 5.3%, signaling deeper, more structural changes in the economy.
As 2025 approaches, it’s clear that the combination of stagnant incomes, a weakened franc, and structural policy changes will continue to alter lifestyles. Families will need to adapt, cut back, and find creative ways to navigate an increasingly tight economic landscape.
But resilience is a hallmark of Rwandans. Even amid these pressures, there’s a quiet determination to push forward. As Jean puts it, “It’s not easy, but we find ways. We have to.”
These stories—of sacrifice, adaptation, and resilience—are more than just numbers. They are the heartbeat of a nation navigating economic challenges while holding onto hope for a better future.