The cost of living in Rwanda Per Month is high

The cost of living refers to the amount of money needed to sustain a certain standard of living, including basic expenses such as housing, food, healthcare, transportation, education, and entertainment. It varies depending on location, lifestyle, family size, and personal choices.

In this article, we are going to talk about the amount of money you will need to live in Rwanda every Month if you are a single person or a compounded family. Let's first have a small introduction to Rwanda.

Overview on Rwanda

Rwanda is a landlocked country located in East Africa with a population of 13,246,394 Million, 26,338 Square Kilometers (10169.159 Square miles) a density population of 501.98 Km² (193.80 Square miles). This makes it the 28th country with the highest countries Density population The country shares the borders with 4 Countries in the North there is Uganda, in the south there is Burundi, in the East there is Tanzania while in the West there is Democratic Republic of Congo DRC, Rwanda is highly elevated which gives the nickname "The Country of Thousands of hills".

Rwanda has the fastest-growing economy in Africa with an average of 4.0 percent in the last two decades. Though the country marks the growing Economy in Africa Rwanda is still counted on the list of the world’s poorest countries Ranked at 165^th according to the International Monetary Fund (IMF) among the country members. The Rwandan Economy mostly depends on Agriculture where about 70 percent of the population depends on Agriculture. In 2023, the current market value of Gross Domestic Product (GDP) is estimated at RWF16.355 billion; 44 percent of this is the service sector, 27 percent is agriculture, 22 percent is the business sector and 7 percent is indirect taxes. This year, Rwanda's GDP grew at an average annual rate of 8.2%.

The cost of living in Rwanda has been affected by the increase in international food prices due to external factors such as the war in Ukraine which was the main source of fertilizers and Fuel this caused the reduction of domestic food production where crop yields decreased by 2.1 percent in 2022. In 2022, the National Institute of Statistics of Rwanda reported the annual inflation rate of food staff in Rwanda was 59.2 percent.

Figure 1: Food Inflation in Rwanda Year to Year, 2023

Source: NISR (Januar, 2023)

According to Enquete Integre Sur les Conditions de Vie (EICV 5) report conducted by the National Institute of Statistics of Rwanda (NISR), Families with low-income spend over a third of their income on food staff, The price of staple foods, which makes up of food supply for these poor families, has increased significantly. Current inflation patterns are also robust and affect the poorest households the most. Historically, in response to high food price inflation and other economic shocks, 72 percent of Rwandan households reported purchasing less food, leading to lower food consumption, with families particularly at risk.

According to numbeo.com the world’s most research institution on the cost of living database has reported that a family composed of 4 Persons for example (Husband, wife, and two kids) requires an estimated Monthly cost of RWF2,004,858.9 without rent a simple family of one person estimated Monthly costs are RWF567,912.0 comparing to the United States of America, the cost of living in Rwanda is 62.5 percent lower while rent in Rwanda on average is 76.9 percent lower than the United States of America (USA).

Below is the table that indicates what is in the basket of the Cost of living in Rwanda

In Conclusion, Understanding both purchasing power and the cost of living is crucial for making informed financial decisions. Purchasing power reflects the value of money in terms of what it can buy, while the cost of living indicates the expenses required to maintain a certain standard of living.

By considering these factors together, individuals, businesses, and policymakers can assess economic conditions, plan budgets, set prices, and make choices about spending, saving, investing, or relocating. Monitoring changes in purchasing power and the cost of living helps in adapting to economic fluctuations, managing personal finances effectively, and ensuring a
comfortable and sustainable lifestyle.

You find that there are some issues you never utilize in your life and some staff are at the international standards like utilities, apartments, McDonald's meals, etc don’t be confused you can use the same table to adjust your cost and then help you make a comparison to your income again most of the component if referred to urban cities.

Author: Donald Masimbi