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Inflation Dynamics in Post-Independence Rwanda

Author

Listed:
  • D.W. Kimolo

    (University of South Africa)

  • N.M. Odhiambo

    (University of South Africa)

  • S. Nyasha

    (University of South Africa)

Abstract

This study examines the inflation dynamics in Rwanda from the 1970s to 2021, focusing on policies, trends, challenges, and opportunities in managing inflation. Secondary data sources were used for analysis. The findings show that Rwanda has adopted a multi-faceted approach to inflation control, including macroeconomic policies, economic diversification, and infrastructure investment. The study identifies three distinct episodes of high inflation in the 1970s, early 1990s, and 1994. Since the early 2000s, inflation trends have been erratic, with notable episodes in 2004, 2008-2009, 2012, and 2020. Challenges in managing inflation include import reliance, weak monetary policy transmission, and vulnerability of the agriculture sector. Opportunities for Rwanda lie in economic diversification, improved coordination between fiscal and monetary policy, and sound macroeconomic policies. The study emphasizes the need for a comprehensive approach to inflation management, considering Rwanda's unique circumstances, to achieve stability and inclusive growth through sound policies, diversification, and infrastructure investment.

Suggested Citation

  • D.W. Kimolo & N.M. Odhiambo & S. Nyasha, 2024. "Inflation Dynamics in Post-Independence Rwanda," Working Papers WP072024, African Economic and Social Research Institute (AESRI).
    • Handle: RePEc:afa:wpaper:wp072024
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    References listed on IDEAS

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    1. Daniel Ayalew Ali & Klaus Deininger & Marguerite Duponchel, 2014. "Credit Constraints and Agricultural Productivity: Evidence from rural Rwanda," Journal of Development Studies, Taylor & Francis Journals, vol. 50(5), pages 649-665, May.
    2. Kasim Ggombe & Richard Newfarmer, 2017. "Rwanda: From devastation to services-first transformation," WIDER Working Paper Series 084, World Institute for Development Economic Research (UNU-WIDER).
    3. Lutz Kilian, 2014. "Oil Price Shocks: Causes and Consequences," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 133-154, October.
    4. Kasim Ggombe & Richard Newfarmer, 2017. "Rwanda: From devastation to services-first transformation," WIDER Working Paper Series wp-2017-84, World Institute for Development Economic Research (UNU-WIDER).
    5. Kuteesa, Annette, 2012. "East African Regional Integration: Challenges in meeting the convergence criteria for monetary union," Research Series 148956, Economic Policy Research Centre (EPRC).
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    More about this item

    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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