Even taking into account home consumption of own production, which may not have been fully accounted for in the estimate of household consumption in rural areas, this bias remains important, and may partly explain the large urban-rural income and poverty gaps, especially to the extent that the poverty indicators are estimated from the household per capita expenditure aggregates (Fambon et al. [2001]).<sup>34</sup>

**Table 2: Composition of demand by Sector at market prices**

_(in millions of US dollar)_

|Sectors<br>Demand<br>Addressed to sectors|**Rural**<br>**sector of**<br>**non traded**<br>**products**|**Rural**<br>**sector of**<br>**traded**<br>**products**|**Urban**<br>**informal**<br>**sector**|**Urban**<br>**private**<br>**sector**|**Public**<br>**sector**|**All**<br>**sectors**|
|---|---|---|---|---|---|---|
|Household consumption|1 771|32|2 088|2 710|165|6 766|
|Government consumption|0|0|0|0|889|889|
|Intermediate consumption|588|432|2 217|2 878|27|6 142|
|Private investment by origin|-444|-81|763|739|0|977|
|Public investment by origin|0|0|0|252|2|254|
|Exports|6|447|0|1 731|0|2 184|
|Aggregate demand by sector<sup>35</sup>|1 921|830|5 068|8 310|1 083|17 212|
|**As a share of aggregate**<br>**demand across all sectors**|**11.16**|**4.82**|**29.44**|**48.28**|**6.29**|**100.00**|

Source: Authors’ calculations.

The high rate of consumption puts a number of sectors in a vulnerable position, and particularly the deficit prone ones facing disinvestments and rapid depreciation of their capital stock. Most vulnerable of all is the rural non traded sector, which has an extremely high consumption share and a large deficit. The high deficit of this sector is illustrated by the negative value of investment, reflecting changes in the capital stock after valuation effects. Moreover, to the extent that no public investment is allocated to this sector, the reduction in the stock of private capital further exacerbates the overall depreciation of aggregate capital stock in this sector.

Unlike the non traded rural sector, which produces mainly for domestic consumption, the export share of aggregate demand in the rural traded sector is important, and reflects the rising trend of export revenues. The prospect of continued large increases in export gains were hampered by the depreciation of the capital stock, however, though of smaller magnitude. At over US$7.96 million, the depreciation of privately owned capital represents about 18% of total consumption and about 10% of aggregate demand at the sectoral level. Given the low level of household consumption in the rural traded sector, the difficulties of this sector may have been amplified by the high costs of intermediate consumption. Indeed, earnings from rural traded goods barely equal the value of total intermediate consumption.

> 34 The value of home consumption of own production in rural areas may be more than offset by the valuation of own occupied imputed rent if the latter is not accounted for in urban areas, therefore limiting the scope of omission bias.

> 35 Aggregate demands are estimated as the sum of total consumption, intermediate and final consumption by households, government, total investment (private and public) and export.

15