4 th Session of the Continental Steering Committee (CSC) for the African Project on the Implementation of the 2008 System of National Accounts

Transcription

1 4 th Session of the Continental Steering Committee (CSC) for the African Project on the Implementation of the 2008 System of National Accounts Report on the Survey of The Current Status and Needs Assessment for the Implementation of the 2008 SNA in Africa Secretariat November 2015 Addis Ababa, Ethiopia

2 United Nations Economic Commission for Africa African Centre for Statistics Report on the Survey of The Current Status and Needs Assessment for the Implementation of the 2008 SNA in Africa Secretariat March 2015

3 Table of Contents EXECUTIVE SUMMARY INTRODUCTION COUNTRY ACTION PLANS AND FOLLOW-UP ACTIONS... 5 Country Action Plans... 5 Follow-up Actions Taken by Countries... 8 Scheduled Transition towards the 2008 SNA... 8 Baseline Information TECHNICAL AND FINANCIAL NEEDS Training Needs Technical Assistance Needs Financial Support Needs Additional Financial Support Needs CONCLUSIONS AND RECOMMENDATIONS ANNEX: DETAILED RESULTS OF THE SURVEY Page 2 of 39

4 EXECUTIVE SUMMARY Among the 44 African countries that have responded to the survey, 38 countries indicated that they have formulated or are in the process of formulating national actions plans for implementing the 2008 SNA. Most of the countries with completed national action plans have begun taking concrete follow-up actions for implementation. Furthermore, 34 countries have identified a timeframe for transitioning towards the 2008 SNA: 12 countries have selected a timeframe between 2010 and 2014 and the remaining 22 counties will begin transitioning towards the 2008 SNA between 2015 and At the same time, countries have expressed the needs for on-site training, technical assistance, and financial supports. The most cited activities for these assistance and supports are as follows: Collection and processing of source data (Pre-SNA) SNA 2008 compliance for production and assets boundaries (Pre-SNA) Compilation of employment matrix (Milestone 1) Compilation of supply and use table (Milestone 1) Calculation of GDP by expenditure approach (Milestone 1) Calculation of quarterly GDP (Milestone 2) Institutional sector accounts to be compiled up to financial accounts (Milestone 5) Tables in the report list the needs by individual countries for on-site training, technical assistance, and financial supports, which provide useful information for development partners, international, regional, and sub-regional organizations to design plans, programs, and projects; and to coordinate their efforts in support of African countries in the area of national accounts. Page 3 of 39

5 1. INTRODUCTION The African common project on the implementation of the 2008 SNA was launched in January 2014 and is currently in its first phase, which is scheduled for two years until the end of As a part of the monitoring, evaluation, and reporting of the project, a survey was conducted in November 2014 to obtain information on the current status of the implementation of the 2008 SNA and to have an assessment of countries needs. The design and contents of the questionnaires were first presented and discussed at the meeting of the African Group on National Accounts (AGNA) held on 3-6 February 2014 in Addis Ababa, Ethiopia with the participation of Heads of National Accounts of 45 countries. The questionnaire has three components. The first component contains basic information that identifies countries and respondents. The second component lists a series of activities in the order of sequence and stages of compilation of national accounts, in which countries are asked to indicate (a) which activities have been included in their national action plans, (b) whether they have taken followup actions to carry-out the related activities, and (c) if they need any support and assistance in training, on-site technical assistance, and financial support for each of the activities. The third component addresses general issues related to measures taken to carry-out national action plans and the expected date to begin moving towards the 2008 SNA. The preliminary results of the survey were circulated and discussed during the third Meeting of the Continental Steering Committee (CSC), 8-9 December 2014 in Tunis, Tunisia. The meeting found the content of the survey to be very useful not only to collect country level data on SNA implementation but also for strengthening the alignment of demand and supply between countries and development partners as well as for improving coordination among development partners in conducting technical assistance in Africa. The meeting requested the Secretariat of the African Project to further gather the responses, update, and finalize the report for circulation. Up to the beginning of March 2015, the completed questionnaire has been received from the following 44 countries: Algeria Angola Benin Botswana Burkina Faso Burundi Cameroon Cape Verde Chad Comoros Congo Côte d'ivoire Djibouti Egypt Ethiopia Gabon Gambia Ghana Guinea Guinea Bissau Kenya Lesotho Liberia Madagascar Mali Morocco Mauritius Mauritania Mozambique Niger Nigeria Central African Republic Seychelles Senegal Sierra Leone South Africa South Sudan Swaziland Tanzania Togo Tunisia Uganda Zambia Zimbabwe This report is compiled based on the information collected from these countries. The report contains four sections: Section 2 describes country plans and follow-up actions taken by countries to implement the 2008 SNA; Section 3 addresses the needs for on-site training, technical assistance, and financial support by countries; and Section 4 concludes with the main findings and implications for stakeholders of the African Project on the 2008 SNA. Page 4 of 39

6 2. COUNTRY ACTION PLANS AND FOLLOW-UP ACTIONS Country Action Plans Among the six pillars of the African Project on the 2008 SNA, the primary one is for countries to compile national action plans and to take follow-up actions accordingly. Among the 44 countries that responded to the questionnaire, 22 countries (50%) indicated that they have formulated national actions plans for implementing the 2008 SNA. The 22 countries are: Algeria, Benin, Burkina Faso, Burundi, Cameroon, Egypt, Ethiopia, Kenya, Lesotho, Liberia, Mali, Morocco, Mauritius, Niger, Nigeria, Uganda, South Africa, South Sudan, Swaziland, United Republic of Tanzania, Tunisia, and Zimbabwe; and majority of them have taken some follow-up actions. In addition, 16 countries (36%) have indicated that they are currently in the process of formulating national action plans. The 16 countries are: Angola, Botswana, Congo, Côte d'ivoire, Gabon, Gambia, Ghana, Madagascar, Mauritania, Mozambique, Central African Republic, Senegal, Seychelles, Sierra Leone, Togo, and Zambia. Table 1 shows the 13 activities listed in the questionnaire in the order of the sequence of the compilation of national accounts. Table 1: Activities required for the implementation of the 2008 SNA No. Short Title Long Version Milestones 1 ISIC rev4 and CPC Implementation of ISIC rev4 and CPC ver2: Adaptation in national level Pre SNA ver2 of ISIC rev 4 and CPC ver2 2 Data collection Collection and processing of source data: e.g. Survey of intermediate Pre SNA and processing consumption; Survey of informal sector; Survey of household consumption, etc. 3 SNA boundaries SNA 2008 compliance for production and asset boundaries: The SNA 2008 conceptual compliance questionnaire is achieved; especially important in this is covering non observed economy and more specifically the informal sector. This requires action on many areas. Pre SNA 4 IT tool for compilation IT tool for compilation of national accounts: Use of the tools like assistance to the compilation of the national accounts 5 Employment Employment matrix: Labor input matrix is compiled for these categories matrix and institutional sectors. This is important in the context of achieving GDP exhaustiveness (e.g. taking into account the informal sector). 6 SUT Supply and use table: Compiled and GDP estimated through this framework 7 GDP (P) by Production approach GDP by industrial economic activities: Identify industries the industry groups (compilation categories) according to ISIC Rev 4 classification that are relevant for the country for which estimates of GO, IC and GVA and GVA components would be compiled. These can be at 1/2/3/4 digit ISIC 4 or a combination of these depending on the relevance to the country. 8 GDP (P) by institutions Production approach GDP by institutions: The GO, IC, GVA and GVA components estimated for these categories would be compiled separately for (a) general government (within this separately for administrative departments and departmental enterprises), (b) financial corporations, (c) non financial corporations, (d) households and if possible also for (e) NPISHs; Pre SNA Page 5 of 39

7 No. Short Title Long Version Milestones 9 GDP (E) Expenditure approach GDP: Expenditure side estimates are compiled 1 for various categories for the overall economy; HFCE and GFCE will be according to purpose classifications of COICOP and COFOG, respectively, but it should be possible to convert these data to compilation categories. 10 Quarterly GDP Quarterly GDP: estimated from production and expenditure and also at 2 current and constant prices. 11 Production and generation of income accounts Production and generation of income accounts are compiled for institutional sectors: This is possible if GVA is estimated by institutional sectors as above Sector accounts up to capital account 13 Sector accounts up to financial accounts Institutional sector accounts are compiled until capital account: For the overall economy, rest of the world and general government. The accounts of overall economy will give estimates of GNI, gross national disposable income and savings. Institutional sector accounts up to financial accounts: Change in net worth is compiled for institutional sectors. In the questionnaire, countries were asked if the activities listed in Table 1 have been included in their national action plans for the implementation of the 2008 SNA. Chart 1 displays the number of countries that have included the related activities in their national action plans in descending order. For example, there are 38 countries that have included production approach to GDP by industrial economic activities in their country action plans, while there are 23 countries that have included institutional sector accounts up to financial accounts in their action plans. 4 5 Page 6 of 39

8 Chart 1: Country action plans and follow-up actions on the 2008 SNA (by activity) Data collection and processing GDP (P) by industries ISIC rev4 and CPC rev2 GDP (P) by institutions GDP (E) SUT Quarterly GDP Sector accounts up to capital accounts IT tool for compilation Production and generation of income accounts SNA boundaries Employment matrix Sector accounts up to financial accounts Included in national action plan Follow up action taken As illustrated in Chart 1, the top six activities that have been incorporated in the national action plans by 36 to 38 countries are: Collection and processing of source data Production approach to GDP by industrial economic activities Implementation of ISIC rev4 and CPC ver2 Production approach GDP by institutions Expenditure approach GDP Supply and use table A second tier of activities that a large majority of countries, i.e. 28 to 34 countries, have included in their national action plans are: Quarterly GDP Institutional sector accounts compiled up to capital account IT tools for compilation Production and generation of income accounts compiled for institutional sectors SNA 2008 compliance for production and asset boundaries Employment matrix Lastly, the final activity included in the national action plans of 23 countries is institutional sector accounts up to financial accounts. Page 7 of 39

9 It is worth noting that among the three activities at the bottom of the above list, i.e. (i) SNA 2008 compliance for production and asset boundaries, (ii) Employment matrix, and (iii) institutional sector accounts up to financial accounts, the first two, namely, (i) to define the production and asset boundaries in compliance with the 2008 SNA and (ii) to compile employment matrix to capture the informal sector and incorporate it into national accounts are prerequisites for the compilation of national accounts as indicated in Table 1 above. The fact that approximately 10 countries, that is one quarter of the countries, have not included them in their national action plans may be an alarming sign. We may need to address the issue during the process of formulating national action plans. This is especially so given the baseline situation that not all countries have properly defined the production and asset boundaries as shown in Tables 4 and 5 below. On the other hand, that 23 out of 38 countries, 60% countries, have included the compilation of (iii) institutional sector accounts up to financial accounts in their national action plan is encouraging: the majority of African countries have demonstrated that they would aim to achieve Milestone 5 of the implementation of the 2008 SNA by the end of the project. Follow-up Actions Taken by Countries Countries were also asked to check on the activities in which follow-up actions are undertaken. The summary of the answers is represented by the light bars in Chart 1 (follow-up actions taken). For example, among the 13 activities, the highest number of countries that have taken follow-up actions on the related activities is 28 for the production approach GDP by institutions and production and generation of income accounts while the lowest number of countries is 21 on the implementation of ISIC4 and CPC ver2, IT tool for compilation and institutional sector accounts up to financial accounts. In response to general questions in the Questionnaire, III (a) What actions have been taken to carry-out the national plan? the following are the actions that have been mentioned: Strengthening the institutional framework and management structure for national accounts; Adhering to international classifications (activities, products, etc.); Harmonizing with other statistical systems such as the balance of payments, public finances, etc.; Administering statistical operations including censuses, surveys, studies, etc.; Improving conditions to access different data sources; Updating the business register; Conducting training for national accountants; Changing to a new base year and software for compilation of national accounts. Scheduled Transition towards the 2008 SNA Based on the response to question III (b) When will be the date to start moving to the 2008 SNA?, Table 2 presents the number of countries planning to transition to the 2008 SNA by year from 2010 to out of 44 countries, i.e. 77% of the responding countries, have identified a specific timeframe for transitioning toward the 2008 SNA with the timeframe ranging from 2010 to Page 8 of 39

10 Table 2: Number of countries planning to transition to the 2008 SNA per year Period Number of countries Percentage (%) To be decided Total In general, countries can be classified into three groups. The first group, called the alreadymoved group, is comprised of countries that have begun the transition toward the 2008 SNA. There are 12 countries in this group: Egypt, Ethiopia, Cameroon, Kenya, Mauritius, Uganda, Senegal, South Africa, South Sudan, Swaziland, Tanzania, and Zambia. The second group, called the group, consists of countries that plan to transition to the 2008 SNA between 2015 and There are 22 countries in this group: Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cape Verde, Comoros, Congo, Côte d'ivoire, Gambia, Ghana, Lesotho, Liberia, Madagascar, Mali, Morocco, Mauritania, Niger, Seychelles, Sierra Leone, and Togo. The third group, called the undecided group, includes the rest of the countries. Baseline Information According to a survey conducted by ECA at the end of 2013 right before the African Project was launched, the above is against the background as in the following. First, in terms of the conceptual basis of national accounts, i.e. the version of the SNA, six countries at that time reported that they have already adopted at least some of the new features of the 2008 SNA: Egypt, Equatorial Guinea, Malawi, Nigeria, South Sudan, and Zambia; while 42 countries were following the 1993 SNA, and six countries following the 1968 SNA. Second, in terms of international classifications used for the national accounts, Table 3 shows numbers and percentages of countries using the three main international classifications. ISIC is the classification of establishments/enterprises by kind of economic activity; COICOP is the international classification of household expenditures; and COFOG is the classification of government expenditures by function public order, defense, health services, industry, agriculture, etc. Table 3: International classifications used in national accounts Classification Number of countries Percent ISIC Rev ISIC Rev ISIC Rev Page 9 of 39

11 Classification Number of countries Percent COICOP COFOG Source: ECA (2013) Survey on National Accounts Patterns in Africa: Statistical and Administrative Data Sources. Nearly two-third of countries use COICOP, over half use COFOG, and almost all countries are using one or other version on ISIC. The numbers of countries that are shown as using ISIC exceed 48 because several countries are using mixtures of the latest and earlier systems. Third, for GDP at constant price and update, Chart 2 shows the base years now used for constant price GDP estimates. According to the result of the survey, only five countries have base years that are five or less years old by the end of Furthermore, 20 countries have base years between 6 and 10 years old; while the SNA recommends that the base year should be updated every five years. Chart 2: Base years for constant price estimates (Number of countries) Number of countries Base year now being used for constant price Source: ECA (2013) Survey on National Accounts Patterns in Africa: Statistical and Administrative Data Sources. Fourth, regarding production and asset boundaries, Table 4 lists eight kinds of economic activity that are included in the SNA production boundary but which are difficult to measure. Omission of any of these activities means that GDP is underestimated and inter-country comparability is thereby reduced. Other goods for own use and Premium supplements included in insurance output are not quantitatively significant in most countries, but failure to properly cover the other items listed in Table 4 may lead to substantial underestimation of GDP. Table 4: Scope of production boundary Economic Activity Number Percent Agricultural products for own use Other goods for own use Housing services by owner occupiers Page 10 of 39

12 Economic Activity Number Percent Services of paid domestic staff Own account construction Informal sector enterprises Premium supplements included in insurance output Consumption of Fixed Capital included in the estimates of government output Source: ECA (2013) Survey on National Accounts Patterns in Africa: Statistical and Administrative Data Sources. Nine countries do not try to cover informal sector enterprises and three more have only partial coverage; seven countries do not estimate value added of agricultural products for own use and one has only partial coverage; housing services by owner-occupiers is not covered in six countries; and consumption of fixed capital is excluded from government value added in ten countries. Table 5 lists eight types of assets that should be included in gross fixed capital formation but which are known to be omitted or poorly covered by many countries. The last two on the list are only assets according to the SNA 2008 which is why only a few countries include them. Table 5: Scope of asset boundary Economic Asset Number Percent Own account construction Cultivated assets Animals with life of over one year and giving repeated yields Government defense expenditures on fixed assets that can be used for civilian purposes Computer software Expenditures on mineral exploration R&D expenditures Government defense expenditure on weapons like tanks, warships, fighter planes, etc Source: ECA (2013) Survey on National Accounts Patterns in Africa: Statistical and Administrative Data Sources. Some of the items listed in Table 5 may be quantitatively insignificant in many countries such as the cultivated assets and the mineral exploration. Others are likely to be important in all countries. Eight countries omit own account construction and one has only partial coverage, and 22 countries do not count expenditure on computer software as capital formation. Page 11 of 39

13 3. TECHNICAL AND FINANCIAL NEEDS Training Needs In implementing the 2008 SNA, countries face challenges for which they have requested active capacity building in terms of on-site training. Chart 3 captures the training needs of countries by the activities as listed in Table 1 and for each activity countries are placed into three groups, i.e. the already-moved, , and undecided groups as explained in the above Scheduled Transition towards the 2008 SNA section. Furthermore, Chart 3 presents the data on training needs of countries in descending order, i.e. from the activities most frequently requested to the least. Chart 3: Training needs of countries (by activity and planned date for moving to 2008 SNA) Quarterly GDP Sector accounts up to financial accounts SNA boundaries Employment matrix Sector accounts up to capital account Production and generation of income accounts GDP (P) by institutions SUT Data Collection and processing ISIC rev4 and CPC rev IT tool for compilation GDP (E) GDP (P) by industries Already moved Undecided According to the number of countries that have expressed training needs, the top four activities requested by 22 to 24 countries are: Quarterly GDP Institutional sector accounts up to financial accounts SNA 2008 compliance for production and assets boundaries Employment matrix Additionally, the second tier of six activities requested by 19 to 21 countries includes: Institutional sector accounts compiled up to capital accounts Production and generation of income accounts compiled for institutional sectors Production approach GDP by institutions Supply and use table Collection and processing of source data Implementation of ISIC rev4 and CPC ver2 Page 12 of 39

14 Finally, the last three activities for which countries expressed training needs are IT Tools for compilation (17 countries), expenditure approach GDP (17 countries), and production approach GDP by industrial economic activities (14 countries). The top four activities on the above list are significant. First, as Chart 3 illustrates, training on the calculation of Quarterly GDP is requested by most of the countries (29 countries). The importance of quarterly GDP cannot be overstated. Quarterly GDP is more relevant and practical than annual GDP for current economic policy formulation. Policy makers in ministries of finance, planning and central banks can use quarterly national accounts to adjust monetary and fiscal policy in real time to achieve their growth and employment targets, while the annual GDP is usually published at least six months after the year has ended. For this reason almost all developed countries now compile GDP on a quarterly basis. Table 6 shows the number of countries publishing annual and quarterly GDP at current and constant prices according to the three standard methods of estimation as the sum of value added (GDP (P)), as the sum of final expenditures (GDP (E)) and as the sum of compensation of employees, operating surplus, mixed income, and consumption of fixed capital (GDP (I)). Table 6: Published GDP estimates Annual And Quarterly GDP at Current and Constant Prices Number Percent Annual GDP at current prices Annual GDP at constant prices Quarterly GDP at current prices Production (GDP(P)) Expenditure (GDP( E )) Income (GDP (I)) Production (GDP(P)) Expenditure (GDP( E )) Production (GDP(P)) Expenditure (GDP( E )) Income (GDP (I)) Production (GDP(P)) Quarterly GDP at constant prices Expenditure (GDP( E )) Source: ECA (2013) Survey on National Accounts Patterns in Africa: Statistical and Administrative Data Sources. As observed, approximately 30% of African countries now publish quarterly GDP (P) in current prices and over a third publish quarterly GDP (P) in constant prices; although GDP (E) is more policy-relevant than GDP (P): both monetary and fiscal policy instruments operate directly on the final expenditure components of GDP. Table 7 shows which countries publish quarterly GDP (P) and GDP (E). Table 7: Countries publishing quarterly GDP GDP Current prices Constant prices Country GDP (P) GDP (E) GDP (P) GDP (E) Algeria x x x x Botswana x x x x Burundi x Page 13 of 39

15 GDP Current prices Constant prices Country GDP (P) GDP (E) GDP (P) GDP (E) Cameroon x x Djibouti x x Egypt x x x x Ghana x x Kenya Mauritius x x x x Morocco x x x x Mozambique Nigeria x x x x Rwanda x x x x Senegal Seychelles x x South Africa x x x x Tanzania Tunisia x x x x Uganda Total Source: ECA (2013) Survey on National Accounts Patterns in Africa: Statistical and Administrative Data Sources. It is interesting to note that five countries publish only GDP (P) at constant prices Kenya, Mozambique, Senegal, Tanzania, and Uganda. They use volume indicators, such as production and employment, to extrapolate their latest quarterly GDP into the current quarter. This is a technique that could be used by other countries in the region as a relatively easy way to start compiling quarterly GDP. Second, as indicated in Table 1, to compile institutional sector accounts up to financial accounts is to reach to Milestone 5 of the implementation of the 2008 SNA. A training program on this subject would cover many other activities on the list. x x x x x Third, defining production and asset boundaries and compiling employment matrix are prerequisites for the compilation of the 2008 SNA. Responses to the questionnaire illustrate that many countries have found it necessary to have a training program with a systematic coverage of these two subject matters in terms of related concepts and methodology. Table 14 in the Annex provides an overview of individual countries needs for training. Technical Assistance Needs Technical assistance will address the needs of countries on particular subject areas or topics for 2008 SNA implementation. This will be conducted through demand-driven technical assistance missions. Chart 4 captures the technical assistance needs expressed by countries on the related activities. The chart is presented in the structure similar to Chart 3: i.e. countries are grouped by Page 14 of 39

16 the scheduled date for moving to the 2008 SNA and the activities are listed in descending order according to the number of countries making the requests. Chart 4: Technical assistance needs of countries (by activity and planned moving date) Sector accounts up to financial accounts SNA boundaries Quarterly GDP Employment matrix GDP (E) Sector accounts up to capital account Data Collection and processing SUT GDP (P) by institutions Production and generation of income accounts IT tool for compilation ISIC rev4 and CPC rev2 GDP (P) by industries Already moved Undecided According to the number of countries that have requested technical assistance, the following four activities are requested by 26 to 31 countries: Institutional sector accounts up to financial accounts SNA 2008 compliance for production and asset boundaries Quarterly GDP Employment matrix The second tier of seven activities requested by 20 to 22 countries for technical assistance includes: Expenditure approach GDP Institutional sector accounts compiled up to capital accounts Collection and processing of source data Supply and use table Production approach GDP by institutions Production and generation of income accounts compiled for institutional sectors IT tools for compilation Finally, the last two activities for which countries expressed technical assistance needs are implementation of ISIC rev4 (16 countries) and production approach GDP by industries (15 countries). The four activities at the top of the list are consistent with those that are in the list of training needs. Page 15 of 39

17 As illustrated above, it is encouraging that more than 70% of the countries (i.e. 31 out of 44) answering to the questionnaire would request for technical assistance on the subject of compiling sector accounts up to financial accounts. While it is not clear how many African countries have compiled the sequence of institutional sector accounts up to capital and financial accounts, according to the survey conducted by ECA in 2013, countries were asked if they compiled the sequence of accounts for the total economy and the six institutional sectors. The sequence of accounts is to cover the following: Production account Distribution of income account Redistribution of income account Use of income account (as far as net or gross saving) The results are summarized in Table 8. Table 8: Full sequence of accounts compiled by African countries Sector Number Percent Total economy General government Financial Corporations Non financial corporations Households Rest of the World Non Profit Institutions Serving Households (NPISH) Table 8 shows that over 70% of countries have compiled the sequence for the total economy and over 60% for general government. However, less than 60% of the countries that answered to the questionnaire have compiled the sequence accounts for financial, non-financial, households, the rest of the world, and the NPISH sectors. Therefore, we know that not many countries have compiled the institutional sector accounts up to capital and financial accounts. Timely and proper technical assistance will surely help countries to move forward in this area. Table 15 in the annex provides an overview of individual countries needs for technical assistance. Financial Support Needs The availability of financial resources for carrying-out each of the activities is critical to the effective and timely implementation of the 2008 SNA. While not all countries have put down a number for financial needs on the questionnaire (only about 51% of countries did so), Chart 5 summarizes the figures that have been gathered from the answered questionnaires. Chart 5 is designed in a similar structure as Charts 3 and 4. Financial assistance support captured in Table 17 was also required for other components of 2008 SNA implementation. Altogether, the total needs for financial assistance amounts to 29.5 million USD. Page 16 of 39

18 Chart 5: Financial assistance needs of countries (number of countries by activity) Data collection and processing Sector accounts up to financial accounts Employment matrix Quarterly GDP SNA boundaries IT tools for compilation GDP (P) institutions ISIC rev4 and CPC rev2 Sector account up to capital account SUT GDP (P) industries GDP (E) Production and generation of income accounts As shown in Chart 5, the most significant activity at the top of the list is data collection and processing with 27 countries indicating that they face financial shortages for carrying-out this activity. The budget for data collection and processing amounts to 12.5 million USD by all responding countries, representing 42% of total needs of financial assistance. A second tier of six activities have been identified by 17 to 21 countries for which they need financial support. These activities include: Institutional sector accounts up to financial accounts Employment matrix Quarterly GDP SNA 2008 compliance for production and asset boundaries IT tool for compilation Production approach GDP by institutions The budget required for the second tier of six activities amounts to 10.7 million USD according to countries. A third tier of six activities have been identified by 10 to 15 countries for which they need financial support. These activities include: Implementation of ISIC rev4 and CPC ver2 Institutional sector accounts up to capital accounts Supply and use table Production approach GDP by industries Expenditure approach GDP Production and generation of income accounts compiled for institutional sectors The budget required for the third tier of six activities amounts to 4.5 million USD according to countries. Page 17 of 39

19 The above list of activities in descending order based on the amount of the financial support requested by countries reflects the challenges and priorities at the country level for the implementation of the 2008 SNA, which are also quite consistent with the lists for training and technical assistance needs. SUTs have proved an excellent mechanism for ensuring that the GDP estimates from the production side (GDP (P)) and GDP (E)) are consistent and in the process of achieving consistency the estimates of both supply and use are made more reliable. The use of SUTs for estimating the basic GDP aggregates is now standard practice in North America and Europe and an increasing number of countries in other regions are adopting them. Thus, it is listed as an activity to be carried out in Milestone 1 of the implementation of the 2008 SNA. Table 9 shows the numbers of countries that have indicated to have adopted Supply and Use tables for GDP estimation and also the numbers of countries using the ERETES 1 software to estimate their SUT. Table 9: Countries basing their GDP estimates on a Supply and Use Table Supply and Use Table based on ERETES Supply and Use Table not based on Countries not currently No information ERETES compiling SUT Algeria Ghana Botswana Angola Benin Egypt Djibouti Chad Burkina Faso Eritrea Ethiopia Comoros Islands Burundi Guinea Bissau Gambia Libya Cameroon Liberia Guinea Namibia Cape Verde Madagascar Kenya Sao Tomé Central African Republic Malawi Lesotho Congo Mozambique Rwanda Cote d Ivoire Nigeria Seychelles Democratic Republic of the Congo Senegal Sierra Leone Equatorial Guinea Somalia South Sudan Gabon South Africa Sudan Mali Uganda Swaziland Mauritania Zimbabwe Tanzania Mauritius Morocco Niger Togo Tunisia Zambia 1 ERETES is the French acronym for Equilibre Ressources Emplois et Tableau Entrées Sorties (Supply Use Balances and Input Output Tables). Spanish and English versions of the ERETES software are available but there are no Spanish or English versions of the acronym and ERETES is used in all languages. Page 18 of 39

20 Supply and Use Table based on ERETES Supply and Use Table not based on ERETES Countries not currently compiling SUT No information Source: ECA (2013) Survey on National Accounts Patterns in Africa: Statistical and Administrative Data Sources. While it looks impressive at first sight with 33 out of 48 countries claiming to base their GDP estimates on a SUT, in many cases the SUTs are rather out of date and the structure of an old SUT is being projected forward to the current year. In such cases there may be no special advantages in basing the GDP estimates on a SUT. Chart 6 shows the dates of the latest SUTs compiled by 33 African countries (not necessarily the same 33 countries as in Table 12). Chart 6: Reference year of latest SUT (as of March 2013) Source: AfDB (2013) Situational Analysis of the Reliability of Economic Analysis in Africa: Special Focus on GDP Measurement. Only 22 countries had compiled SUTs for 2007 or a more recent year. Basing GDP estimates on a SUT older than that my well do more harm than good. The financial needs of countries for each of the 13 activities can be summarized using descriptive statistics such as the minimum and maximum to indicate the range of dispersion and the mean and median to indicate the central tendency of the financial support needs. Altogether, the financial assistance needs expressed by countries amounts to 29.5 million USD. Table 10: Financial assistance needs of countries by activity (thousands of US Dollars) 2008 SNA Activities Total Min Max Mean Median Collection and processing of source data 12, , Employment matrix 2, Quarterly GDP 2, SNA 2008 compliance for production and asset 2, Page 19 of 39

21 boundaries 2008 SNA Activities Total Min Max Mean Median Other (as in Table 18) 1, Supply and use table 1, Production approach GDP by institutions 1, IT tool for compilation of national accounts 1, Institutional sector accounts up to financial accounts 1, Institutional sector accounts up to capital account Implementation of ISIC rev4 and CPC ver Production approach GDP by industrial economic activities Production and generation of income accounts are compiled for institutional sectors Expenditure approach GDP Total 29, , As Table 10 illustrates, the top five activities according the total amounts of financial needs are: Collection and processing of source data Employment matrix Quarterly GDP SNA 2008 compliance for production and asset boundaries A second tier of activities has the following six activities: Supply and use table Production approach GDP by institutions IT tool for compilation of national accounts Institutional sector accounts up to financial accounts The third tier is: Institutional sector accounts up to capital account Implementation of ISIC rev4 and CPC ver2 Production approach GDP by industrial economic activities Production and generation of income accounts are compiled for institutional sectors Expenditure approach GDP On top of the list of Table 10, besides the five items discussed above, IT tools for the compilation of national accounts is also an important activity that countries found that there is a need for financial support. As shown in Table 9, ERETES is favored as the IT tool most widely used in Africa particularly by French speaking countries (by 19 countries). Computer systems for national accounts such as ERETES make use of the accounting identities of the SNA to confront and adjust data coming from different sources. Data confrontation and adjustment are essential parts of the compilation of national accounts: traditionally this was done manually but it is both quicker and more accurate to do these tasks using specially designed Page 20 of 39

22 computer software. The main advantage of ERETES compared with other computer systems is that ERETES is supported by a permanent secretariat (by the French national statistical office (INSEE) and EUROSTAT) which can call on a group of multilingual national accountants and IT experts who have gained experience of applying the system for more than a decade in nearly thirty developing countries. ERETES is also regularly updated and improved. The fact that a country is using ERETES or some other computer system does not guarantee that its national accounts are comprehensive and reliable: that depends as always on the reliability and range of source data available. But the use of a computer system such as ERETES ensures that whatever data are available are being exploited in the most efficient way possible. Countries that do not use ERETES may use other software or simply use Microsoft Excel to compile national accounts including SUTs. IT tools would help countries to automate the procedure and improve efficiency and productivity. This is an area that needs to be strengthened with the support of development partners and international, regional, and sub-regional organizations. Furthermore, the mean and median measurements are useful for illustrating the central tendency of the financial assistance needs of countries. For example, for the activity collection and processing of source data while the maximum request is 1.6 million USD, the average of the financial assistance needs for this activity is 498 million USD while the median is 210 million USD. Similarly, the activities for which countries have expressed the highest average financial support needs include: supply and use table at 136 million USD, employment matrix at 124 million USD, quarterly GDP at 121 million USD, SNA 2008 compliance for production and asset boundaries at 109 million USD, and production approach GDP by institutions at 102 million USD. Table 16 in the Annex provides details on individual countries financial needs per activity. National accounts estimates are only as good as the basic data from which they are derived. The importance of strengthening the activity of data collection and processing is also supported by an earlier survey conducted by AfDB in 2013 ( Situational Analysis of the Reliability of Economic Analysis in Africa: Special Focus on GDP Measurement ). Table 11 shows the numbers and percentages of countries that have had at least one survey or census since 2000 covering six important aspects of the economy - household expenditures, industrial and agricultural output, labor force participation, the informal sector, the numbers and characteristics of dwellings, and the population. Table 11: Availability of key survey data Questions on availability of key survey data Yes answers Number % Have you had a household expenditure or budget survey since 2000? Have you had an agricultural survey or census since 2000? Have you had an industry/enterprise/business survey or census since 2000? Have you had a household labor force survey since 2000? Have you had a survey of the informal sector since 2000? Page 21 of 39

23 Questions on availability of key survey data Yes answers Number % Have you had a survey or census of dwellings since 2000? Have you had a population census since 1990? Source: AfDB (2013) Situational Analysis of the Reliability of Economic Analysis in Africa: Special Focus on GDP Measurement. Taking the agricultural survey or census and the population census as an example: First, only 18 countries (53% of the responding countries) have had a census or survey of agriculture since 2000, which is not sufficient given the importance of agriculture throughout Africa. Second, population censuses are an important data source for national accounts in developing countries. Population growth rates are commonly used to extrapolate employment, expenditures or incomes from periodic household and business surveys. It is often used for rebasing national accounts. Population censuses are usually carried-out every ten years and 31 countries have had one or more population census since Twenty of these are 5 years old or less but in six countries the latest population census was carried out more than ten years ago. And three large economies (Algeria, Democratic Republic of the Congo, and Nigeria) have had no population census since Outdated census data or, even more, their complete absence, would affect the quality of both GDP levels and growth rates. When data are used from an earlier survey they have to be extrapolated to the current year using a relevant indicator. The reliability of the extrapolated estimate will depend on both the relevance of the indicator used and on the length of the period. As a rule of thumb, if the survey data are more than five years old (2006 or earlier in this case), the extrapolated data can be taken as of poor reliability. Table 12: How old are the survey data? Type of Survey Earlier than or later Household income/expenditure survey 4 30 Agriculture survey/census 4 14 Industry/business survey 6 22 Household labor force survey 8 19 Informal sector survey 6 12 Dwelling survey/census 3 17 Population census Source: AfDB (2013) Situational Analysis of the Reliability of Economic Analysis in Africa: Special Focus on GDP Measurement. Table 12 shows the numbers of countries with survey data dating before and after It is evident that in order to have more timely and reliable data for extrapolating data to be used for the compilation of national accounts, data collection and processing in terms of surveys and censuses need to be carried-out more often and frequently in many African countries. Table 13 shows the ten most frequently cited sources for each of the three GDP estimates and, in the last column, for all three estimates combined. Of the most often cited sources for all GDP Page 22 of 39

24 estimates, only Household Income and Expenditure Survey and Consumer prices are statistical sources. The same is true if one looks at the sources used for GDP (P), GDP (E), and GDP (I) separately. What is most striking is the heavy preponderance of administrative data. Table 13 Ten most important sources for GDP (Number of countries citing source) Source of Data GDP(P) GDP(E) GDP (I) STATISTICAL SOURCES Population census Page 23 of 39 All GDP estimates Household income and expenditure survey Agriculture census/survey 37 General economic census/survey 15 Wages of private sector employees 21 Consumer prices Unit values or price indices for imports 22 Unit values or price indices for exports 23 ADMINISTRATIVE DATA Wages of government employees Wages of other public sector employees 18 Number of employees in government 35 Value added taxes Other taxes on products Income tax on persons 13 Income tax on businesses 15 Government accounts Government Finance Statistics (GFS) Company accounts Utility company records : water and electricity 38 Transport company records rail, roads, and air 37 Bank supervisory statistics 35 Insurance supervisory statistics 34 Balance of payments Merchandise trade statistics Source: ECA (2013) Survey on National Accounts Patterns in Africa: Statistical and Administrative Data Sources. Additional Financial Support Needs The additional financial support needs indicated by the countries include methodological support and training in national accounts. In the area of methodological support, countries identified the following limitations: calculating insurance production, consumption of fixed capital, national accounts at constant prices, the sharing of financial intermediation services indirectly measured (FISIM), and the rebasing of national accounts. The requested financial assistance to address these issues is 1,824,000 USD shown in Table 18 in the Annex.

25 4. CONCLUSIONS AND RECOMMENDATIONS The survey of the Current Status and Needs Assessment of the 2008 SNA in Africa provides useful information on the national action plans of countries for implementation of the 2008 SNA and the follow-up actions countries have taken; as well as on the timeframes countries have identified for transitioning towards the 2008 SNA; and the on-site training, technical assistance and financial support needs of countries for implementing the 2008 SNA. The report finds that of the 44 African countries that responded to the survey, an overwhelming majority, 38 countries (86%), have formulated or are in the process of formulating national actions plans for implementing the 2008 SNA. Additionally, countries that have completed formulating national action plans have begun taking concrete follow-up actions for implementation. Furthermore, 34 of the 44 countries (77%) have identified a timeframe for transitioning towards the 2008 SNA. Of these 34 countries, 12 countries have selected a timeframe between 2010 and 2014 and thus, have begun transitioning towards the 2008 SNA. The remaining 22 counties will begin transitioning between 2015 and Although countries have developed national action plans, begun taking concrete follow-up actions, and have selected timeframes for transitioning towards the 2008 SNA, the survey finds that countries are in need of technical and financial support for carrying-out the 13 activities identified for implementation of the 2008 SNA. As the survey illustrates, the top five activities requested by most countries in the area of training, technical assistance, and financial supports are as follows: Training: Quarterly GDP Institutional sector accounts up to financial accounts SNA 2008 compliance for production and assets boundaries Employment matrix Institutional sector accounts up to capital accounts Technical assistance: Institutional sectors accounts up to financial accounts Identifying the production and assets boundaries of 2008 SNA Quarterly GDP Employment matrix Expenditure approach GDP Financial support (by number of countries): Data collection and processing Institutional sector accounts up to financial accounts Employment matrix Quarterly GDP SNA compliance for production and asset boundaries Page 24 of 39

26 Financial support (by amount of funding needs): Data collection and processing Employment matrix Quarterly GDP SNA 2008 compliance for production and asset boundaries Supply and use table As a summary to consolidate the above list, the following are the most cited activities that countries have expressed the needs for on-site training, technical assistance, and financial supports: Collection and processing of source data (Pre-SNA) SNA 2008 compliance for production and assets boundaries (Pre-SNA) Compilation of employment matrix (Milestone 1) Compilation of supply and use table (Milestone 1) Calculation of GDP by expenditure approach (Milestone 1) Calculation of quarterly GDP (Milestone 2) Institutional sector accounts to be compiled up to financial accounts (Milestone 5) The survey results should serve as a good reference for development partners, international, regional, and sub-regional organizations to design work plans, programs and projects and take targeted actions based on the identified training, technical and financial needs for 2008 SNA implementation in Africa. To share the information and to align the demand of countries with the supply of the development partners, international, regional, and sub-regional organizations in terms of capacity building and financial supports will strengthen the coordination for maximum impact and lead to a timely and effective implementation of the 2008 SNA in Africa. Page 25 of 39