Single equation models for inflation forecasting in Rwanda

This study evaluates Phillips curve forecasts of inflation for Rwanda. The study relies on the use of various single equation prototype Phillips curve models, as described by Stock and Watson (2008). Pseudo out-of-sample comparison tests are used to evaluate the forecast performance of these Phillips curve forecasts relative to the AR (autoregression) benchmark forecasts. In this regard, tests of equal forecast accuracy based on mean square forecast error and those based on forecast encompassing as used by several scholars (for example, Clark and McCracken (2001, 2005), Rapach and Weber (2004)) are reported. Furthermore, the results from forecasts using inflation in levels and in differences as the dependent variable are reported, to check the sensitivity to this specification issue. The study finds that the Phillips curve and augmented Phillips curve forecasts outperform the AR benchmark forecasts at one- and two-quarter horizons. The output gap, exchange rate and money supply (M3) are found to be good predictors of inflation in Rwanda in the generalised Phillips curve context. It is therefore strongly recommended that Rwandan economic policymakers take into consideration these variables when forecasting inflation

Agroforestry for Improving Small-Scale Farm Yield in Volcanic Highlands in Rwanda

This paper attempts to examine the role of agroforestry in improving crop yield of small-scale agriculture in the region of Volcanic Highlands of Rwanda. We conducted a survey to a random sample of 401 crop growers, including 305 agroforestry adopters and 95 non-adopters, selected from the study area. An econometric model that lowers the heterogeneity between the treatment and the control groups was specified and estimated. Results revealed a considerable difference in farm yields between agroforestry practitioners and non-practitioners. The adoption of agroforestry appears to have a good impact on small-scale agricultural yield, even though this effect is not statistically significant. Results also show that factors including farm investment cost, market accessibility, cooperative membership and return of plan leftovers to the soil have a significantly substantial effect on farm productivity. On the other hand, farm experience and cultivated land area have a detrimental but considerable impact on farm productivity. Based on the research findings, governmental institutions and development associates should promote and hasten the adoption of agroforestry structures, start increasing support for agroforestry adoption through proximity to extension services and accessibility of high-quality plant seedlings, support for the sustainability of farm cooperatives along with financial support for enhancing farm investments and guarantee a continuous and increased market access to crop farmers so as to ensure sustainable sources of farm investments

Regional Trade and Competitiveness of Rwandan Agriculture: Empirical Analysis of Selected Priority Foodstuffs

This study aims at investigating the impact of regional integration on the agricultural trade development by focusing on wheat flour, maize grain, maize flour, potato, rice and soybean, fresh bean and dried beans sectors selected among priority foodstuffs in Rwanda. This is motivated by the lack of the studies comparing the competitive performance of all priority staple foods sub-sectors in Rwanda in the context of regional trade. The analysis used secondary data obtained through documentary reviews and those collected from the National Bank of Rwanda and FAOSTAT on imports and exports of Rwanda from 2007 to 2017. Apart from the literature review, the analysis was conducted using the Net Export Index (NEI) and the Grubel-Lloyd (GL) measure. The literature review and empirical results reveal that Rwanda benefited from its accession to regional and global trade blocks, especially in terms of the ease of access to external markets through the establishment of the Common Market, the Customs Union and the alleviation of some of trade barriers for basic foodstuffs and consumer goods. The analysis of the Net Export Index and the Grubel-Lloyd measures revealed that Rwanda can have a comparative advantage for wheat flour, fresh beans and dried beans at regional and global markets if measures aiming at developing a dynamic commercial network and improving agricultural value chains productivity are put forward