Abstract
In this study, the objective is to show the role of supply and
use tables/Input-Output table in economic development of Rwanda in order to
build a coherent model that can be useful for Rwanda's National Accountants in
analyzing possible effects of alternative economic policies over different
segments of the society. As necessary and reliable statistics are difficult to
obtain for compiling a social accounting matrix for Rwanda, this work has
limited to the analysis of SUT, I-O table, and Satellite Accounts and economic
development of Rwanda. A consistent and comprehensive analysis has reached due
to the analysis of GDP on the period of 1999 to 2009 and Human Development
Index ranging on the period of 1985 to 2010. Furthermore the objective of this
study is to construct relationship between SUT and Economic Development which
can be employed by modellers in construction of relevant models for Rwanda's
economy.
With the policy of IMIDUGUDU, AGASOZI INDATWA, rural access
index has been improved regarding investment done. Almost all basic needs for
development have been made available such as school, health centres, roads
electricity. These changes towards development as explained above are
increasing as public and private sector decide to increase investments, and
those investment are captured by the SUT as GFCF which include public and
private sectors. Therefore, the increase in GDP due to the increase in GFCF can
push Rwanda towards economic development.
For many reasons GFCF has direct effect on development. With
education, and health serves, the impact of infrastructure services measured by
GFCF in SUT on human development is direct. The impact is also indirect through
economic growth.
Rwanda's economy has recovered from 1999 compare to the
slowdown of 5 years before 1999. Gross domestic product rose 6% more than a
full percentage point higher than in 2008. The recovery has been widespread
throughout rural areas, with the creation of cooperatives, privatization,
education...which affect different mode of economic development such as mode of
production and value added on different product produced locally, mode of
consumption, mode of investment, mode of exportation and mode of taxation. And
all those modes are the main components of SUT and I-O table on which different
analysis and policies for development are based.
Chapter I. INTRODUCTION
1.1. General introduction
The simplest possible economy cannot exist without producing
and consuming, so clearly we need account for these two fundamental activities,
even a very primitive economy, however, needs to set aside some of its current
production for the activity of accumulation. And we must recognize the fact
that virtually no economy can supply all its needs from its own resources, so
we need another account for the activity of foreign trade (V.Bulmer-Thomas 1982
2).
At present, the starting point of National Accounts
compilation is often the estimation of an Input-Output Tables or Supply and Use
tables (SUT). Those tables provide an excellent framework for combining the
so-called production approach and expenditure approach to the computation of
Gross Domestic Product (GDP). However, only cursory attention can be paid to
the third approach, the income approach. Expanding such tables in Social
Accounting Matrix (SAM) remedies this short coming of income of various
Institutional Sectors, and by providing a check on these income data through a
comparison with detailed expenditure figures for the same sectors (Steven 1996;
146)
Again, every individual, each society and every country
strives for establishing a self sustained economic development, and Rwanda does
not make exception to this rule. For a sustained economic development , a
system of Economic and Social Accounting Matrix and Extension (SESAME) and a
National Accounting Matrix include Environmental Accounts (NAMEA) are needed
and are largely dependent on reliable information necessary to depict the past
and the present economic situation, so that future efforts can be assessed. The
supply and use tables (SUT) information, thus, is a key factor decision making
in such effort.
Thus, each country needs adequate information in its efforts
of providing welfare of their members. This idea has been emphasized by Welsch
& Short (1987:5), when they mentioned, «The dynamic and successful
society depends on the ability of each organization to measure and report its
accomplishments, to undergo critical self analysis, and, through sound
decision, to renew itself and grow. In this way, individual and social
objectives are sewed best».
For its economic development, Rwanda needs such information
system that helps in providing reliable information upon which economic
activities and economic decisions can be taken. This information system is
nothing other than information from SUT/I-O Table, SAM, NAMEA and SASEME within
the System of National Accounts.
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