The government of Rwanda says it will not revise wages and salaries for civil servants despite biting pockets due to an increase in prices for commodities and services.
The Prime Minister, Dr. Édouard Ngirente told journalists on Wednesday in a press conference that government will not adjust salaries and wages because what the economy is experiencing are mere “shocks” and not a crisis.
“We are experiencing global economic shocks, and not a global economic crisis,” he said. These shocks, he said are caused by two factors.
“We though COVID-19 will be gone after five or six months, but a year collapsed and more. However, you can see that COVID-19 is decreasing towards zero. This was a chock. The second shock is the war in Ukraine. This was has direct effects and indirect effects based on perceptions,” he said.
Ngirente, an economist, says some people have been hoarding goods, fearing uncertainties, and thus affecting market prices.
“Therefore, government can not adjust salaries and wages every time there is a shock,” he says. “We adjust salaries based on other factors such as the value of our currency and price increases that will last long. However, our statistics indicate that prices will drop by next year 2023. It is not a global economic crisis.”
He said that the government is looking for alternatives to mitigate the effects of the economic shock, and it is cognizant of the fact that Rwandans are experiencing hardships.
Meanwhile, regional governments have adjusted minimum wages by at least 12% and above. Tanzania’s economy slowed to 4.8% in 2020, barely edging upward to 4.9% the following year, as COVID-19 travel restrictions battered the tourism sector, a key earner in the East African country. As a result, President Samia Suluhu Hassan decided on an increase of 23.3%, while also increasing the salaries of government workers for the first time since 2016.
Kenyan President Uhuru Kenyatta has announced an immediate increase in the country’s minimum wage by 12 percent to help workers cope with a surge in consumer prices partly due to the Ukraine war. “There is a compelling case to review the minimum wage so as to cushion our workers against further erosion of their purchasing power,” Kenyatta said on Labour Day.
The rise, he said, was necessary because the minimum wage had not been reviewed in three years and the cost of living has increased. Kenya’s current minimum wage is 13,500 Kenyan shillings ($116.68) per month.
The war against Ukraine and sanctions on Russia are hitting economies around the globe, with emerging market and developing countries expected to bear the brunt, according to the World Bank’s latest Economic Update for the region.
This follows devastating effects still being felt due to the corona virus pandemic. The effects include increases in prices for almost every household commodity and industrial commodities such as gas, electricity and raw materials.
Prices in Rwanda
The National Institute of Statistics of Rwanda (NISR) releases figures on Consumer Prices (CPI) in Rwanda.
It said the Urban CPI increased by 7.5 percent in March 2022 compared to the same month of 2021. “Food and non-alcoholic beverages‟ increased by 10.2 percent, „Housing water, electricity, gas and other fuels‟ increased by 8.1 percent, Transport increased by 3.8 percent and Restaurants and Hotels increased by 14.7 percent.
The CPI for March 2022 increased by 3.1 percent compared to February 2022. „Food and non-alcoholic beverages‟ increased by 5.1 percent, „Housing water, electricity, gas and other fuels‟ increased by 3.9 percent and Restaurants and Hotels increased by 8.1 percent.
The underlying inflation rate (excluding fresh food and energy) increased by 7.6 percent when compared to March 2021 and increased by 2.7 percent when compared to February 2022.
The annual average inflation rate between March 2022 and March 2021 is 1.8 percent. The annual average underlying inflation rate is 2.7 percent.
Other selected urban indices
On annual basis, the local goods index increased by 6.1 percent, the imported goods index increased by 12 percent, the fresh products index increased by 4 percent, the energy index increased by 15.9 percent and the core index or the general index excluding fresh products and energy increased by 7.6 percent.
On monthly basis, the local goods index increased by 3.1 percent, the imported goods index increased by 2.9 percent, the fresh products index increased by 2.4 percent, the energy index increased by 8.4 percent and the core index increased by 2.7 percent.
