High food prices likely to lead to an increase in the number of food-insecure households

• Despite shortfalls in bean and Irish potato production, the Season B harvest has increased food availability and income for most people in rural areas. In addition, the increased labor demand for Season C and Season A land preparation is likely to sustain Minimal (IPC Phase 1) outcomes in rural areas. However, the number of people in Stressed (IPC Phase 2) conditions is expected to remain atypically high during the primary lean season, from October to December.

• The forecasted below-average Season A rainfall from September to December and the increased cost of agricultural inputs are likely to reduce crop yields for Season C 2022 and Season A 2023. Increased food sales and price increases for supplemental and non-food items likely lead to early depletion of stocks and limited access to food.

• Minimal (IPC Phase 1) outcomes are likely to be sustained in Kigali City, driven by increased economic activities and income earning opportunities in 2022 compared to 2020 and 2021. However, high food prices will continue to constrain household purchasing power, especially among the urban poor facing Stressed (IPC Phase 2) conditions.

• The estimated 127,194 refugees and asylees in Rwanda as of July 31, 2022, are likely to remain Stressed! (IPC Phase 2!), with monthly food assistance likely preventing worse food insecurity outcomes. Informal petty trade and labor are common sources of income for the refugees benefiting from the growing economic activities in early 2022. The rising prices of food are outpacing the purchasing power of the household’s income and cash-based humanitarian assistance. Refugees are expected to be disproportionally affected by the economic challenges of high food and fuel prices, which will likely constrain demand for informal goods and services.  

In rural areas, seasonal harvests, income from migratory labor, and income from small ruminant and poultry production are expected to generally maintain Minimal (IPC Phase 1) outcomes between now and January. As of June, the gradual start of the Season B harvest is already replenishing household food stocks and boosting market supply. However, atypically high food prices and slight to moderate production shortfalls – mainly among fertilizer-intensive Irish potatoes and moisture-sensitive beans – are expected to lead to an increase in the number of households that are Stressed (IPC Phase 2), especially in Eastern Province, which is a structurally deficit crop producing area. Irregular rainfall distribution and higher fertilizer prices have led to reductions in area planted and crop yields, even though the government has partially subsidized fertilizer products by around 35 percent of the local market price.

Reduced harvest prospects will increase the share of food that some subsistence farming households must purchase from the market, especially during the main lean season in October and November. Yet elevated food prices – as shown by the 23.7 percent rate of rural food inflation on an annual basis in May (Figure 1) – will likely limit their ability to fully cover their daily kcal requirements and essential non-food needs (such as purchasing agricultural inputs) without engaging in stressed coping strategies. While government subsidies are mitigating the severity of food inflation – key informants from Northern Province reported that the prices of sugar and cooking oil dropped by 50 percent and 22 percent, respectively, due to such intervention – staple food prices will likely remain elevated due to the anticipated persistence of the Ukraine crisis and regional trade issues. Household coping strategies will likely include selling more poultry and livestock than usual, spending down savings, and reducing the dietary diversity of meals.

Kigali is also expected to see an atypical increase in the number of households that are Stressed (IPC Phase 2), despite overall expectations for Minimal (IPC Phase 1) outcomes. Although the economy grew by 7.9 percent in Q1 2022, driven by the service, industry, and agriculture sectors, the Government of Rwanda has revised its 2022 economic growth forecast down from 7.2 percent to 6 percent due to the impacts of the Russia-Ukraine war on food and fuel prices. Faltering economic prospects are expected to stall recovery in employment, resulting in below-normal income for un- and under-employed households, particularly if wages struggle to keep up with inflation. As a result, rising staple food prices – captured by the 24.2 percent increase in urban food inflation on an annual basis in May (Figure 1) – and high transport costs will likely continue to constrain purchasing power for some urban households, in turn limiting their access to sufficient food.

Rwanda currently hosts around 127,340 protracted refugees and asylees, many of whom lack stable livelihoods and heavily depend on humanitarian food assistance. Most of this population is expected to remain Stressed! (IPC Phase 2!), with monthly food assistance likely preventing worse food insecurity outcomes. Although growing economic activity in Q1 2022 likely stimulated demand for the types of informal petty trade and labor that displaced populations typically engage in, many refugees and asylees still have insufficient income. Low income, high food prices, and the anticipated economic slowdown leave many at risk of food consumption gaps. As a result, highly vulnerable (86 percent of the population) and moderately vulnerable (7 percent of the population) households will rely on monthly food assistance in the form of a cash transfer to meet their food needs. They are also still likely to use stressed coping strategies to cope with high food and non-food prices if humanitarian funding is insufficient to calibrate cash transfer values in response to market food price fluctuations.

The above scenarios assume current tensions between Rwanda and the DRC persist but do not escalate. If an escalation in tensions were to materialize, then the impacts on cross-border trade and population movement would likely be significant. Food and non-food prices would likely increase more sharply, while household income from petty trade and migratory labor in border areas would notably decline. Deterioration in food security outcomes in some areas would be possible.