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Slow economic recovery extending Stressed (IPC Phase 2) outcomes in urban areas

  • Key Message Update
  • Rwanda
  • July 2020
Slow economic recovery extending Stressed (IPC Phase 2) outcomes in urban areas

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  • Key Messages
  • Key Messages
    • In June, to spur economic recovery, the government reopened nearly all economic sectors and lifted transportation restrictions across the country, except for localized areas in Rusizi District and Kigali which had been identified as COVID-19 hotspots. COVID-19 testing is averaging around 4,300 daily tests in the second half of July and five satellite testing labs are operational in the western and eastern districts. Rwanda is reporting a daily average of 32 confirmed cases of COVID-19 in July, a slight decrease from June which averaged 36 confirmed COVID-19 cases per day. On July 16 the European Union Council declared Rwanda epidemiologically safe.

    • Economic recovery in urban areas has been slower than previously anticipated. Construction, trade and transport, wholesale and retail, and domestic service sectors have been most impacted. According to key informants, many businesses have yet to re-hire most former staff and formal market vendors continue to operate at 50 percent of regular hours due to social distancing regulations. Better-off households are forgoing non-household spending, impacting urban poor livelihoods which mainly rely on petty trade and casual labor. The urban poor are continuing to engage in stressed coping strategies such as skipping meals or eating less, borrowing money, or purchasing food with credit. Church organizations and neighborhood associations continue to provide assistance to the most food-insecure households. Slow economic recovery and below-average income is anticipated to continue to drive Stressed (IPC Phase 2) outcomes in urban areas for the medium term [1]. Assuming an additional urban lockdown does not occur, a return to Minimal (IPC Phase 1) in urban areas is expected by January 2021, assisted by governmental economic recovery funds.

    • The just-concluded Season B harvest is anticipated to be average nationally. Average to above-average rainfall benefited the production of major crops such as maize, banana, and roots and tubers, producing enough to compensate for production shortfalls of moisture-sensitive beans. The July to October Season C production is expected to be average to above-average due to above-average soil moisture at planting and increased acreage under irrigation and drainage. Although a La Niña watch was declared in early July, average rainfall is still forecast for the October-December rainy season in Rwanda.

    • According to NISR consumer price bulletin, the prices of food and non-alcoholic beverages between May and June 2020 increased by an estimated 0.9 percent in rural areas and decreased by an estimated 0.6 percent in urban areas. Food prices in June in rural and urban areas were also 15.7 and 11.2 percent higher than in June 2019, respectively. The implementation of the COVID-19 lockdown initially increased food prices, but the government put in place control measures to limit food price increases.

       

       

      [1] Short term (or near term) (1-2 months); medium term (3-6 months); long term (>6 months).

    This Key Message Update provides a high-level analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography. Learn more here.

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