Despite being geographically far from the direct impacts of the Russia-Ukraine war or the conflict between Israel and Palestine, Rwanda has felt visible economic damage since the beginning of these European and Middle Eastern wars.
Mere weeks into Ukraine’s invasion and the sanctions imposed on Russia, global food, fuel, and fertilizer prices either doubled or rose substantially. Whilst there is a considerable amount of literature on the effects of conflict on host countries – human lives lost, the infrastructures demolished, and futures erased –, there is also a growing body of facts on the spillover effects of conflict in one country onto its neighbors and the rest of the world.
Umutoni Gorette, a mother and hardware store owner in Kigali, opened up about the fluctuations and effects she experienced since the war breakouts, saying, “Well, the oil prices inevitably rose, and since transportation is key in the access of food and other materials we import, that was affected due to the country’s adaptation to the new costly charges, so were the foods.”
Rwandans experienced the first increase in crude oil and natural gas prices almost overnight as the country hiked the price of petrol 8.2% to 1,359 Rwandan francs ($1.32) per liter and diesel 13.9% to 1,368 Rwandan francs ($1.33) per liter. Even then, the government was lending out a helping hand.
Per Gorette’s explanations, the quantity of food she bought after the shifting prices, significantly lowered. In some cases, she allowed herself to feel the losses. She had to diminish her incidentals or cut expenditures entirely in certain areas of her life to compensate for the most meaningful one’s family expenses.
Furthermore, her business, which had been already struggling after the COVID-19 pandemic bled even more. “When you suddenly have to think about the amount of money you’re spending on your car or prices of sugar rising, you tone down other expenses. Clients started spending less on construction materials and practically disappeared,” she said.
In addition, wheat cost rates went up the roof. And since the land locked country imports most of the wheat grain and edible oils consumed domestically, the heatwave of disadvantage garnered a terrible incline in prices of Irish potatoes, milk, sugar, cakes and doughnuts, and other flavored types of food for Rwandans.
The same pain lingers on Alvaro Eric, a 26-year-old IT officer at AB Bank, who affirmed that the onus on him now is to reduce transport expenses from home to work to accommodate other basic needs. “Of course, we’ve adapted to the new normal. I can’t pay for a gym membership unless I’ve first considered my meal budget for the month or the rising taxi bike fees.” he said.
Alvaro’s take is that despite the changing prices of goods, the wages haven’t adjusted accordingly. Despite having plans to enjoy the summer to its fullest, a toll that requires a considerable amount of money, his mission now involves a lot of saving. “Honestly,
where would you run to make this stop? Nowhere really. So, we adapt and hope for the best.” he muttered.
This is enough to make one believe that the prevalence of conflict could explain a broader part of the country’s current economic situation since meaningful economic development cannot happen without peace. Lay people like Gorette and Alvaro had to conform to the new world order.
All over Rwanda, the protracted war in Gaza and Ukraine ramified the general lifestyle of the citizens, weighing on the economy and wealth of the broader population and further disrupting global trade flows. This meant that national household consumption fell, more so in rural households. People started buying less and less, limiting themselves to the absolutely necessary endeavors.
The author Fatmata Lovetta Sesay addressed this topic in her working paper titled “Conflict in Neighboring (Developing) Countries: Direct and Indirect Effects on Economic Growth”, citing, “In a world of increasing demand for globalization, states no longer exist in isolation, but are influenced by their interaction and exposure to the activities of other states.”
In Sesay’s essays, the effects of civil and international wars are not only felt in the countries where they are fought but also in neighboring countries and beyond. Since proper collaboration and partnerships trade ties between countries are paramount in their development, when threatened, consequences cross borders. Because war disrupts trade and other economic activities.
“War seems to frighten investors away rather than attract them to a particular region. It is not only investors who are scared away from these regions. Even interstate trade reduces during conflicts. This is exacerbated by the dependence of some African countries,” Sesay wrote.
Apart from price indentations, the most immediate effect of these wars, as the writer inscribed, is the arrival of thousands of refugees in countries like Rwanda or the rest of Africa and the consequences of this move for the population thereafter.
“Since refugees stay in asylum countries long after the wars end, the social effects on developing countries also continue well into peacetime. Indeed, international wars can increase refugee flows, a factor which raises labor growth and reduces per capita income through migration.” Sesay wrote.
Her argument sprawls on the potential risk of Rwandans having to fight for the few employment opportunities available to refugees and foreigners both as the wars go on and after. Or, as she theorizes, significant resources might be deployed to assist refugees. A critical dilemma that would and has affected households’ income.
Today, threats of war in neighboring countries to Rwanda are looming. DRC screeches with desolation, the US is fueling munitions against Iran, and humanitarian justice is a notion prevailing with no effort. The world as we know it has changed.
Every blowout of mass killing fueled by a solidified resolve and disagreements has affected the common person’s ability to eat quality food or provide for their families a thousand kilometers away.
And though Rwanda is steadily developing through the various partnerships it has, there’s a potential near future without cease-fire where people like Gorette and Alvaro opt to cut more than just shopping or restaurant expenses in the pursuit of a new balanced life comprised of only having enough for affordable meals, bus fares, and toiletry.
