Price Markups, Trust Gaps, and Technology Solutions in Rwanda–Asia Trade: An Empirical Study of Vehicle and Machinery Imports, 2000–2025

Abstract

Purpose — Rwanda’s imports of vehicles and machinery from Asia have expanded since 2000, yet consumer prices remain inflated and direct procurement is rare. This study investigates the determinants of intermediaries’ markups and the trust frictions that deter direct cross-border purchases, and evaluates technology–policy bundles to lower costs and risk. Design/methodology/approach — We adopt an integrative secondary mixed-methods design (2000–2025): a systematic review, triangulated analysis of CIF–retail price spreads, tax/fee schedules, logistics costs, and case evidence. A conceptual framework synthesizes Resource Dependence Theory, Diffusion of Innovations, and Complexity Theory to link structural dependence, information asymmetry, and trust formation. Findings — Imported vehicles and equipment frequently face 50–150% uplifts over CIF, exceeding what formal taxes, VAT, and logistics alone justify. Drivers include market concentration in a small economy, high fixed costs of one-off importing, information asymmetries, and risk premiums that monetize the trust gap. A pronounced deficit of transactional trust—fear of fraud, misrepresentation, and non-delivery—suppresses direct procurement despite potential savings. Evidence indicates that regulated digital escrow, verified-supplier platforms, pre-shipment/arrival inspection, and secure payments can materially reduce payment and quality risk; when paired with consumer-protection enforcement and trade-facilitation measures, these tools are expected to compress markups and increase direct-import uptake. Practical implications — We outline an action blueprint: license escrow providers and embed them in national payment rails; establish a trusted-importer registry and inspection requirements; publish transparent import-cost calculators and market price indices; incentivize fee-based “import-as-a-service” models; and coordinate EAC/AfCFTA mechanisms for cross-border dispute resolution. Scenario estimates suggest average consumer-price reductions on the order of ~20% if a meaningful share of transactions shift to trust-enabled direct imports. Originality/value — This is the first Rwanda-focused, evidence-backed synthesis that jointly models price formation and trust mechanics in high-value imports, reframing trust as infrastructure and proposing implementable tech-policy bundles to rebalance intermediary power and improve welfare.