Rwanda’s government says it is intensifying efforts to protect the country’s economy from a combination of global and domestic challenges that continue to push up the cost of living.
Presenting the government’s plans to Parliament, Prime Minister Dr. Justin Nsengiyumva said that while Rwanda’s economy remains stable, it is increasingly affected by international conflicts, climate change, disease outbreaks such as Ebola and Mpox, and rising prices on both local and global markets.
“These challenges include the effects of international conflicts, climate change, disease outbreaks, and the sharp rise in prices on the global market,” Dr. Nsengiyumva told lawmakers.
The Prime Minister explained that global tensions, particularly the conflict involving the United States and Iran, have driven up the prices of fertilizer, food, construction materials and industrial inputs. Between February and June 2026, fertilizer prices on the international market rose by between 15% and 66%, increasing production costs for farmers.
To ease the burden, the government has committed to covering 50% of the latest fertilizer price increase, in addition to the subsidy already provided. This will raise Rwanda’s fertilizer subsidy budget from just over Rwf39 billion in the 2025/26 fiscal year to more than Rwf64 billion in 2026/27—an increase of 64%.
Agriculture, which supports the livelihoods of most Rwandans, remains one of the sectors most vulnerable to climate change.
Irregular rainfall, prolonged droughts, floods, landslides and crop diseases have reduced harvests and contributed to rising food prices.
To strengthen food security, Rwanda has expanded irrigation to more than 76,000 hectares, with a target of over 82,000 hectares by the end of 2026 and 132,000 hectares within the next three years.
Major irrigation projects, including SAIP, SSIT and the Muvumba Multipurpose Project, are helping farmers improve production.
The government is also promoting sustainable farming by expanding terraces, planting trees and introducing Artificial Intelligence (AI) tools that will provide farmers with real-time information on weather forecasts, fertilizer use, improved seeds and modern farming practices.
“The Government will continue investing in modern weather forecasting systems and early warning technologies so that farmers and other stakeholders receive timely and reliable information,” the Prime Minister said.
Fertilizer use has already increased from 73 kilograms per hectare in 2024 to 80 kilograms per hectare in 2026, with the national target set at 94.6 kilograms per hectare by 2029.
Rwanda is also investing in local fertilizer production through a blending plant capable of producing around 100,000 tonnes annually.
Beyond agriculture, the government will continue exempting agricultural machinery, irrigation equipment and veterinary medicines from taxes while investing in storage facilities, cold rooms, drying equipment and rural roads to reduce post-harvest losses and improve market access.
The Prime Minister also acknowledged growing concerns over water shortages during the current dry season.
“The Government is deeply concerned about water shortages, especially during this dry season, as they continue to negatively affect the lives of Rwandans,” he said.
He attributed the shortages to climate change, declining river flows, rapid population growth and ageing water infrastructure that results in significant water losses through leakages.
To address the challenge, Rwanda plans to increase its daily water treatment capacity from approximately 367,000 cubic metres in 2026 to more than 688,000 cubic metres per day by 2029, significantly improving access to clean water across the country.
What this means for ordinary Rwandans
In simple terms, the government says global conflicts and climate change are making essential goods more expensive, which is why food and other prices continue to rise.
To reduce the impact, it is increasing support for farmers, investing in irrigation and water projects, introducing AI-powered farming services and expanding infrastructure.
While these measures may not lower prices immediately, they are intended to increase food production, improve water supply and make Rwanda’s economy more resilient to future shocks.
