Rwanda’s Oil Industry Might Provide The Country with a Big Boost

The article, written by Stephanie Aglietti, describes a small African country, Rwanda’s extraordinary efforts in growing its essential oil industry. It is divided into three parts, starting with general information of the country’s industry, followed by a more detailed look on a specific company, then by a brief explanation on how the industry stands compared to the region and globally.

First, the writer numerically describes this small nation’s situation regarding the agricultural sector and how it has changed over the years. It states that Agriculture makes up a significant share of their GDP, and also has 80% of the population working in the sector. For each acre of land, the resulting income from producing essential oil can even be four times as much as from harvesting beans. A local agronomist, Nicholas Hitimana, introduced the country to the plant and has aimed to increase the export of this good since 2004 in order to diversify Rwanda’s agriculture.

In the next paragraph, Hitimana argues that his country has a meteorological advantage over South Africa, since they have no winter, thus allowing the country to harvest four times a year compared to South Africa’s two. Next, Aglietti claims that the extracted essential oil from twenty-five hectares of plantation is exported, among many, to the United States, Canada, and South Africa. The agronomist then claims that although first, it was hard to train the employees to take good care of the plants, it later paid off even for them, as they earn significantly more. According to the last part, Rwanda’s oil export almost reached $500, 000 in 2016. In the last paragraph, the writer mentions that the demand for these types of oils is building up year-by-year for its wide variety of usage. Also, the readers get an insight into Rwanda’s developments in meeting these increasing demands by building a new laboratory. Lastly, an authority official sums up the topic by stating that Rwanda can only compete if they are going for better quality and not quantity.

This article’s contents can obviously be explained by the Heckscher-Ohlin theory, although there are some assumptions that are not entirely met. The Heckscher-Ohlin theory assumes that there are identical customer preferences in the country and in the rest of the world, but I think the article implies that Rwanda only produces oil to export, not for local usages. However, this country has an abundance of land, workers in agriculture and doesn’t have winter, thus initially giving it a comparative advantage over many other countries. To grow this advantage, they started to specialize in the essential oil industry by opening a laboratory for quality control.

The effect of this change, which started in 2004, is only at the end of its short-run stage, since they have just realized, that this area makes them earn much more and as a few years before the article, it was still hard to make the workers realize how important it is to do every step of the harvesting process on-time, although this is vital if they don’t want to lose a lot of its yield.

I think Rwanda should specialize in developing its technology and start more professional education programs, as according to the Food and Agriculture Organization of the United Nations, one of the main challenges in Rwanda is the lack of the needed expertise, technology and infrastructure. Due to this, the country has an immense amount of wasted resources and potential. If these were to be developed, the country could become one of the main exporters of the essential oil, an ingredient used in many luxury items. If Rwandan citizens start to see the potential in this commodity, the progress could get into the long-run stage, as workers will most likely abandon beans and other plants and move to the essential oil field.