Producer Prices Rise 20.8% as Mining Costs Jump 77%

Gold is becoming a major aspect of Rwanda’s domestic economy

KIGALI — Prices received by producers in Rwanda rose 20.8% in July from a year earlier, with mining costs jumping more than three-quarters and electricity prices rising by more than a third, keeping pressure on businesses even as the economy continues to expand rapidly.

The latest Producer Price Index (PPI), released by the National Institute of Statistics of Rwanda, shows that the increase was driven by three major components: mining, manufacturing and electricity.

Mining prices increased 77.1% year on year, manufacturing prices rose 17.8%, while electricity prices increased 34.8%.

On a monthly basis, however, the picture was less dramatic. Producer prices increased 0.5% from June to July.

The July increase was actually slower than the 22.3% annual rise recorded in June, when export producer prices rose 29.2%.

The figures matter because producer prices capture costs earlier in the supply chain—before products reach consumers.

Mining is particularly important to Rwanda’s economy because minerals are among the country’s major exports.

A 77.1% increase in mining producer prices therefore reflects a major change in prices received by producers, although it does not mean every household product will rise by the same amount.

The pressure is already visible in broader inflation.

Rwanda’s consumer price index rose 14.5% in July, up from 13.6% in June. That means the prices consumers actually pay for goods and services were rising at a considerably faster pace than the central bank would normally want.

The National Bank of Rwanda has responded by tightening monetary policy, raising its Central Bank Rate to 8.75%.

The policy challenge is complicated by strong economic growth.

Rwanda’s economy expanded by 10% in the first quarter of 2026, according to official statistics, while nominal GDP reached about Rwf6.35 trillion in the quarter.

That combination—rapid growth alongside double-digit inflation—creates a difficult balancing act for policymakers.

Higher producer prices can eventually feed into the cost of food, construction materials, transport and manufactured goods. For businesses, rising input costs can squeeze margins unless they are able to pass those costs on to consumers.

The July figures also show a significant difference between domestic and export markets.

The local PPI rose 22.4%, while the export PPI increased 21.5% over the year.

For a small, import-dependent economy such as Rwanda, the question is how long businesses can absorb higher costs before they begin raising prices.

The latest data suggest some pressure may be easing at the producer level—the annual increase fell from 22.3% in June to 20.8% in July—but prices are still rising at historically high rates.

For consumers, that means cheaper goods are unlikely to arrive simply because economic growth remains strong.

For the central bank, it leaves a difficult choice: continue fighting inflation through higher interest rates without unnecessarily slowing an economy that is growing at double-digit rates.