1.2. Background to the study
The presentation of economic activities in accounts was first
established by William Petty (1676) and Gregory
King (1696). And; François Quesnay (1758)
published a table of total economy based on economic activities. Therefore, the
term supply and use table is not new. The first Supply and Use Tables known as
Input-Output Presentation or Leontief's Model was invented by Wassili
Leontief. This presentation became very useful in determining
the inter-industrial exchanges, and has been adopted in System of National
Accounts to view economic performance and prevision (Jean-Paul PIROU 2006;
5).
On the other hand, the roots of SAM go back to the pioneering
work in social accounting by Gregory King in 1681.However modern social
accounting include SASEME and NAMEA which are largely inspired by the work of
Stone in connection with the Cambridge growth model in the 1950s and 60s .
In 1953, United Nation Organization created an International
System of National Accounts (ISNA), which was revised in 1968, and European
Community created the European System Accounts in 1969.
In 1993, for the purposes of economic evolution and economic
information the ISNA was revised, and became System of National Accounts
(SNA93). In 1993 the System of National accounts has been defined with two main
identities which identify the efficiency of circular flow of income and
expenditure in economy:
Supply of Goods and Services = Use of Good and Services
P+M+CM+TM+TP-SP = IC+ FC + FCFG + ?inv + EX
(P: Production, M:
Imports, CM: Commercial Margins, T:
Transport Margins, TP: Tax on Products, SP:
Subvention on Products, IC: Intermediate
Consumption, FC: Final Consumption, FCFG:
Fixed Capital Formation Gross, ?inv: Changes in
Inventory, EX: Exports)
Today those two identities are more used in Supply and Use
Tables to understand the economy of a country during the whole year, and
reports on Input-Output Tables show that Developed Countries have achieved
their development through the use of it.
1.3. Problem Statement
For the last decades, SNA principles, procedures, and
practices have not been well defined and applied in Rwanda ,and SUT has been
largely viewed only as being GDP tool oriented, in addition, the lack of
professional macro-accountants and sufficient information constrains Rwandan
Institution Sectors (Non financial corporations, Financial corporations,
General government, Household, Non-profit institutions serving households and
Rest of the world) to introduce and use macro-accounting information, and to
compile Input-output Tables in the process of economic development. However the
role of SUT and I-O Table in this process has not been considered with
attention, also no formal system of accounting, practices and principles were
adopted to Rwandan situation to help disclose information used in this process.
Furthermore, comprehensive literatures in the field of National Accounting and
Economic Development are few and poor in Rwanda. Still there is a remarkable
problem of recognition of SUT/ I-O Table and their utilization in the process
of Economic Development in Rwanda.
1.4. Research hypothesis/Research
questions
This study lies on the following hypotheses and
questions.
Hypotheses:
1. The development of Supply and Use Tables/Input-output Table
has a significant role in the perspective analysis of economic development of
Rwanda.
2. Supply and Use tables/Input-Output Table have significant
role in economic analysis and prevision, decision taking, and policy making for
a sustained economic development of Rwanda.
Questions:
1. Is it possible that development of SUT/I-O Table exerts an
influence on economic development? If yes, how a country like Rwanda can have
an access to this development?
2. Is it necessary to develop SUT/I-O Table in order to attain
economic development? And what are the functions of SUT/I-O Table in the
perspective analysis of economic development?
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