Dr. Maxwell Musongole and Shebo NalisheboDr. Maxwell Musongole and Shebo NalisheboSeminar on Developing a Programme for the Implementation of the 2008 SNA & Supporting Statistics in Southern Seminar on Developing a Programme for the Implementation of the 2008 SNA & Supporting Statistics in Southern

AfricaAfricaPretoria, 17-19 October 2012Pretoria, 17-19 October 2012

Republic of ZambiaRepublic of ZambiaCentral Statistical Office

OutlineOutline Overview of the main policy issues & their

relationship with the scope and detail of the national accounts framework;

Overview of current national accounts compilation practices;

New requirements by economic activity and institutional sector; and

Statistical and institutional actions to remedy shortcomings

Overview of policy issuesOverview of policy issues Zambia has undergone 3 ‘policy

periods’: Free market policies (1964-1972) State control (1973-1991) Economic liberalisation

Overview of policy issuesOverview of policy issues Zambian government’s policy objectives are set out in:

Vision 2030 Sixth National Development Plan (2011-2015) Medium term expenditure framework Annual budget speech

Macroeconomic objectives (2011-2015): Attain real GDP growth of at least 7 percent per annum; [averaged 6.5% last 5

years] Reduce inflation to 5 percent by 2015; [currently above 6 %] Raise domestic revenues to at least 20.0 percent of GDP; [2013 budget target

>25%] Reduce domestic borrowing to 1.0 percent of GDP by 2015; Maintain and sustain a sustainable current account position; Create at least 1 million new jobs by 2015; [200,000 new jobs per year] Reduce lending rates;

Overview of policy issuesOverview of policy issues Fiscal policy:

budget forecasts determined on the basis of value of GDP

Revenue, expenditure & grants targets, deficits, domestic debts, determined as a percentage of GDP

Per capita GDP/GNI: used as a human development indicator Have since moved from low income to middle

income country Other policies informed by national accounts:

agriculture, manufacturing, ICT

Shifts in economic structureShifts in economic structure1964-1972 1973-1991 1991-2000 2001-2011

Agriculture, hunting, forestry, fishing (ISIC A-B) 13.3 16.0 19.7 20.2 Mining, Utilities (ISIC C+E) 32.9 19.1 12.3 6.4

Manufacturing (ISIC D) 13.2 23.5 17.7 9.9

Construction (ISIC F) 7.9 4.6 3.8 12.9 Wholesale, retail trade, restaurants and hotels (ISIC G-H) 12.3 13.9 16.3 19.3 Transport, storage and communication (ISIC I) 4.3 4.9 5.2 4.7 Other Activities (ISIC J-P) 16.0 18.1 24.9 26.5

Total Value Added 100.0 100.0 100.0 100.0

Exhaustive measure of Exhaustive measure of economic activityeconomic activity The national accounts are not exhaustive to meet certain policy needs

Data collection was easier during the period of state control Only GDP by industry & expenditure are compiled, no GDP by income

approach Informal activities not adequately covered for the non-agriculture sector Own-account production & housing not adequately covered Local government statistics inadequate – general government statistics

not properly consolidated Not sensitive to new economic activities (based on 1994 base year that

may not depict current economic activities) GNI up to saving compiled; net lending/borrowing not compiled No satellite accounts compiled; so targeted programmes/policies on

tourism, for example, not informed by national accounts statistics

Domestic & external economic & financial Domestic & external economic & financial vulnerabilitiesvulnerabilities External:

Copper prices fluctuations Oil prices fluctuations Instability in international food prices Slow down in world economic growth Exchange rate instability Eurobond

Domestic & external economic & financial Domestic & external economic & financial vulnerabilitiesvulnerabilities Internal:

Drought Food price rise (food shortage): food inflation General inflation (exchange rate volatility) Govt excessive borrowing; govt debt Eurobond (pressure on debt servicing) Inadequate data to base decisions on Inadequate infrastructure – ICTs, hospitals, schools, etc. Power deficits Interest rates (bank rates still high) Unemployment [overall: 7.9%; unemployment (20-24 yrs):

15.3% (37.8 % in urban areas]

Availability of short term Availability of short term statisticsstatistics Daily: Exchange rates Fortnightly: monetary & financial statistics Monthly: CPI; employment statistics from

administrative sources (Zambia Revenue Authority); volume indicators for mining, construction, accommodation, etc.

Quarterly: Index of Industrial Production, Balance of Payments, formal sector employment

Global production issuesGlobal production issues Issues related to goods for

processing, merchanting & intellectual property products not addressed in the current framework

Current national accounts Current national accounts compilation practicescompilation practices National accounts are compiled by the Central Statistical Office, a department under the

Ministry of Finance GDP is compiled annually by the production & expenditure approaches

Official GDP is compiled using the production approach GDP produced at both current and constant prices; only current prices for expenditure

approach Statistical discrepancy reported between the two approaches

Current base year: 1994 Three releases of GDP for a particular year: preliminary, revised and final estimates Industrial classification followed is ISIC rev. 2;

Changeover to ISIC rev. 4 in national accounts compilation planned for 2013; already implemented in the 2011 register of establishments

CPC not used; To be introduced in 2013 as it has been incorporated in the 2012 Economic Census

COICOP for household final expenditure, COFOG for government final expenditure used Household final consumption previously compiled as a residual; now based on data from

the household budget module of the Living Conditions Monitoring Survey

Current national accounts Current national accounts compilation practicescompilation practices NPISH not compiled separately Gross Capital Formation compiled but reported at

aggregate level; Balance of goods and services compiled based on BoP

data Supply & use tables & institutional sectors not compiled Institutional environment:

Legal framework: Census & Statistics Act, Bank of Zambia Act Economic Statistics committee; BoP committee; MoUs between CSO & Revenue Authority, CSO & Pensions

Authority, ZICTA

Current national accounts Current national accounts compilation practicescompilation practices Statistical production process:

Use GDDS framework Developed new register of establishments

(2011) Use a combination of administrative &

survey data Dissemination of statistics done every last

Thursday of the month

New requirementsNew requirements Changeover to 2008 SNA:

Within the framework of the Economic Census project Review of economic statistics (price & volume indicators used) –

IMF missions Business register developed (both enterprise & establishment

levels) Training in benchmarking & input-output analysis conducted for 3

members of staff in the Netherlands FISIM & its allocation – work currently going on Industry classification: ISIC rev. 4 implemented in population

census, economic census, labour force survey Product classification: CPC introduced in 2011/12 economic census Prices: CPI rebased to 2009; plans to compile PPI (included in 2013

budget; will require technical assistance)

New requirements: Economic CensusNew requirements: Economic Census Two phases: listing phase and enumeration phase Listing phase implemented 4th quarter 2011;

comprehensive establishment register developed, and based on ISIC rev. 4 classification Used as sampling frame for enumeration phase

Enumeration phase completed mid-October 2012 Industry-specific questionnaires designed to be 2008 SNA

compliant Ancillary activities with separate accounts accounted for

separately as establishments; treatment of head office; etc. Expected outputs:

Short term: 2010 benchmark & base year; provincial GDP; Medium term: quarterly GDP, SUT/IOT, institutional sector accounts

Institutional actions Institutional actions Hinges on the implementation of NSS

within the NSDS framework Revision of the Census & Statistics Act

(currently 1964) Technical assistance to review data

collected from Economic Census: IMF Afritac South Mission (November 2012); Micromacro (December 2012)

Thank You!