The role of supply and use/input output tables in the perspective analysis of economic development of Rwanda with example

List of Tables and Graphics

Tables

Table 4.1. A Simplified Supply and Use Framework 17

Table 4.2. A Simplified Symmetric Input-Output Table (Product by Product) 18

Table 4.3. Environmental Indicators 30

Table 4.4. Estimated Simplified Supply and Use Framework in Billion Frw (in Constant 2006 Prices) 33

Table4. 5. Estimated Simplified Symmetric input-output table (product by product) in Billion Frw (Constant Price) 34

Table4.6 Input Coefficients 34

Table 4.7. Changes in Input Coefficients 37

Table 4.8. Used Abbreviations 38

Figures

Figure 2.1. National Accounting and Policy Analysis ............................................................5

Figure 2.1. Conceptual Framework.................................................................15

Figure4.1. Disaggregation of Household Categories...............................................................5

Figure 4.2. Human Development Index Trend (1980-2005) 31

Figure 4. 3. Evolution of Human Development Index 32

Figure 4.4. Change in Production due to Changes in Input Coefficients (2007 Basic Years) 37

Figure 1. Appendices: From Supply and Use tables to Input-Output Tables..........................i

List of Abbreviations

?inv: Changes in Inventory,

AGE: Applied General Equilibrium () model

CM: Commercial Margins

CPC: Central Product Classification

EDPRS: Economic Development and Poverty Reduction Strategy

EX: Exports

FC: Final Consumption,

FCFG: Fixed Capital Formation Gross,

GDP: Gross Domestic Product

GFCF: Gross Fixed Capital formation

GNI: Gross National Income

HDI: Human Development Index

HS: Harmonized System

IC: Intermediate Consumption,

IEA: Integrated Economic Account

IPAR: Institute of Policy Analysis and Research - Rwanda

ISIC: International Standard Industrial Classification

ISNA: International System of National Accounts

M: Imports

MDGs: Millennium Development Goals

NAMEA: National Accounting Matrix include Environmental Accounts

NISR: National Institute of Statistics of Rwanda

NUR: National University of Rwanda

P: Production

P RSP: Poverty Reduction Strategic Paper

SAM: Social Accounting matrix

SNA: System of National Account

SP: Subvention on Products,

SUT/ I-O: Supply and Use Tables/ Input- Output Table

T: Transport Margins

TP: Tax on Products

UNDP: United Nation Development Program

Abstract

In this study, the objective was 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 tables, and Satellite Accounts and economic development of Rwanda.

Assuming that the Input-Output Coefficients as derived from Input-Output Table remain more or less constant for a certain period of time (say a couple of years), they may in a meaningful way be used in so called Input-Output Models or Inter-Sectoral Models, which describe the relationship between the output of various branches on the one hand and their different input requirements on the other hand. Such kind of models may play a role in different types of analysis related to policy preparation and planning in Rwanda as shown in this research, and Input-Out put approach would be a powerful too in analyzing and planning process of economic development and industrial growth in Rwanda.

A consistent and comprehensive usefulness of SUT/IO-T in Economic Development was reached due to the analysis of Central Equation System for Input-Output Analysis «Z = B*(I-A)^-1F» and Output Function X = B^* * (I-A)^-1y. Furthermore the objective of this study was to construct relationship between SUT and Economic Development which can be employed by modellers in construction of relevant models for Rwanda's economy.

This study showed that much analyses of economic development of Rwanda need to be based on economy wide basis (e.g. development planning) and this suggests the need of macro-economic approach. Most macro-models however are so highly aggregated so that they can perforce assumed degree of resource mobility which is just not present in Rwanda. The appropriate answer in the Perspective Analysis of Economic development of Rwanda seems to be SUT/Input-Output analysis, which is macro in terms of its coverage and get «micro» in terms of its approach.