Transcript At current price - United Nations Statistics Division

SEMINAR ON SNA IMPLEMENTATION
10th – 13th December 2013,
Uganda, KAMPALA
Presented by: Ms. Aminata E. Deen
The Gambia Bureau of Statistics
1
Outline of the Presentation
 Background: (overview of the Gambian Economy
(recent economic developments)
 Policy issues (relationship with the national accounts
framework)
 Current Status of compiling (producing annual
GDP estimates)
 Compilation by Economic Activity (Data
Sources and Methodology)
 Conclusions: -constraints and challenges
 Way Forward: -areas for improvement
2
Economic Profile
3

The Gambian economy performed well in recent years, with robust
growth and low inflation, despite the global financial crisis and major
shocks to fuel and food prices. However, tourism and residential
construction (financed by remittances) were hit hard by the global crisis.

The economy is largely agriculture with about 80% of the population
engaged in farming. On average, Agriculture contributes about 30% to
the GDP while Industry and Services accounts for 12% and 57%
respectively. GDP per capital was estimated at $544 as at end Dec. 2012.

During 2007–2010, real GDP growth averaged around 5.5 percent a year,
driven mainly by a strong expansion in agriculture and services, including
financial services and telecommunications.
Economic Profile contd’
 In 2011 however, growth was estimated to have fallen to
about 4.3 percent, owing to the initial effects of a crop
failure during the 2011-12 crop season.
 In 2012, a strong rebound in the agriculture and tourism
sectors helped to moderate the decline in the 2011 and the
economy registered a significant growth of 6.1 percent
 Inflation averaged around 5 percent a year during 2007-
2012, as the Central Bank of The Gambia (CBG) generally
maintained a restrained monetary stance over the years.
4
Economic Profile contd’
 Although the external current account deficit widened in
recent years, official international reserves remained at a
comfortable level, (partly because of the IMF’s SDR allocation in 2009). As of
the end of 2011, gross reserves was equivalent to 5.1 months
of imports cover.
 Strong economic growth, particularly in rural areas,
contributed to a significant reduction in poverty. Based on
the 2010 household income & expenditure survey, the
headcount poverty index, based on a poverty threshold of
USD 1.25 a day, fell to 48.5 percent in 2010, compared with
58 percent in 2003.
5
Economic Profile contd’
 Despite these positive developments, the Government’s debt
burden continued to weigh heavily on the economy and the
country remains at high risk of distress on its external debt.
 The Government’s domestic debt (about30 percent of GDP) at the end
of 2011, also poses high risks, as three-fourths of the debt
was in the form of T-bills with maturities of one year or less,
creating very high roll over risks. Moreover, interest on
domestic debt has been very high, consuming about 18
percent of government revenues in 2011.
6
Economic Profile contd’
 In recent years, domestic debt has been rising (relative to
GDP), as government revenues fell steadily from
17.3 percent of GDP in 2007 to 14.9 percent of GDP in
2011, while episodes of severe spending overruns resulted in
large fiscal deficits. In 2010 particularly, the Government’s
net domestic borrowing (NDB) rose to (4.7 percent of
GDP), leading to increased pressures on inflation, interest
rates, and the exchange rate.
7
Main Policy Issues
 The primary role of government is to develop policies that
encourage growth in order to promote the society’s economic
well being.
 The Gambia Government is thus committed to reducing
poverty and improving the well-being of its population; this
commitment is driven by Vision 2020, which is being
executed through a series of medium-term development
strategies.(The PRSP I &11, now the PAGE).
 The Programme for Accelerated Growth and Employment
(PAGE) is The Gambia’s new development strategy and
investment programme for 2012 to 2015.
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Main Policy Issues contd’
 PAGE is the main interface between the Government and The
Gambia’s development partners and is fully aligned with the
Millennium Development Goals (MDGs).
 PAGE priorities include support for agriculture, education,
health, and stepped-up investment in infrastructure. To this
effect, a policy agenda document the MEFP was established by
the IMF and The Gambia Government in which the
improvement of quality economic statistics was emphasized.
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Main Policy Issues-Cont’d
 Given the constrained resource envelope for PAGE period,
and the continued high risk of debt distress, the Government
has launched a sustained effort to engage other development
partners and attract support.
 Highlighted in the PAGE, macroeconomic stability is essential
for achieving high growth rates and increased employment. In
this context, continued progress on reducing the burden and
risks associated with the Government’s domestic debt will be
the anchor to the macroeconomic policy framework over the
medium term.
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Main Policy Issues- (relationship to
national accounts framework)
 To allow the implementation of PAGE, the Government is now
in the process of reforming its macroeconomic sector.
 Regarding
the fiscal framework, the Government has
introduced a Value Added Tax (VAT) system in the Gambia, a
Medium Term Expenditure Framework (MTEF) and a more
comprehensive Programme Based Budgeting (PBB) system.
 Monetary policy has been designed to keep inflation in the low
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single digits. For the real sector, the Government will increase
investment in agriculture from about 6 per cent of domestic
resources in 2011 to 10 per cent during the PAGE period.
Main Policy Issues- (relationship to
national accounts framework)
 The macro model. The Macroeconomic Policy Analysis Unit
(MPAU) of the Ministry of Finance and Economic Affairs has
developed, an “Operational Consistent Macroeconomic
Accounting Spreadsheet Model” for the Gambian economy. The
analytical framework is consistent with the basic concepts and
interrelations under the UN System of National Accounts (UNSNA), and the IMF Government Finance Statistics (GFS),
Balance of Payments (BOP) Statistics, and the MonetaryFinancial Statistics (MFS).
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Main Policy Issues- (NSDS I)
 The Gamba NSS witnessed during the last decade important
institutional reforms and the undertaking of key activities
which included the following:
 The drafting and adoption of a new Statistical Act of 2005 replacing the
1972 Act;
 The preparation and adoption of the Strategic Plan for the development
of Statistics ( first generation of NSDS I);
 The conduct of an economic census in 2006;
 The conduct of an Integrated Household Survey;
With these two main activities, The creation of The
Gambia Bureau as a semi-autonomous institution in
2005 and the rebasing of both the National Accounts and
the CPI
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Status of Producing Annual GDP Estimates
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
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In the Gambia, given the resources and the data currently
available, the National accounts framework could not be fully
implemented; focus has been on ensuring GDP (one of the main
aggregates) and its main components are measured in the most
appropriate way. As far as possible, the estimates of GDP are
compiled in accordance with the principles and concepts of the
SNA93.
In 2004/05 The Gambia Bureau of Statistics (GBoS) conducted a
Census of the Gambian economy which provided the statistics
necessary to compile a new benchmark to determine the level of
GDP. In the same vein, an Integrated Household Survey (IHS)
was also conducted in 2003/04 with the main objective of
rebasing the Consumer Price Index (CPI).
Status of Producing Annual GDP Estimates Cont’d
15

The economic census thus provided benchmark data for
compiling annual GDP using the production approach and also
made it possible for migrating from SNA68 to SNA93. The IHS
which provided data for rebasing the CPI also provided the first
opportunity for independently estimating GDP using the
expenditure approach.

The old GDP series of 1976/77 benchmark (SNA68) has now
been replaced by an up to date base 2004 and is in line with the
SNA93 while the old CPI series of 1974 base has also been
revised to 2004 base.
Status of Producing Annual GDP Estimates Cont’d

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Annual estimates of GDP are compiled by estimating the GVA
for each branch of activity in the economy, both in current
prices and in constant (2004) prices. Benchmark estimates of the
value of output for each activity are based primarily on the
information obtained from the Economic Census questionnaires
that were designed for the various economic activities (except for
crop production and public administration).
Estimates are available for each activity on the: Total output,
Intermediate consumption, and Gross value added.
Once the estimates of GVA by activity were computed, two
adjustments were made in order to convert total GVA at basic
prices into GDP at market prices for both current and
constant. The first is FISIM and the second is taxes (less
subsidies) on products. FISIM is thus subtracted from the total
gross value added while taxes less subsidies on products is
added.
Estimating GVA by activity at current prices
 The procedure used for estimating GVA at current prices is as
follows:
-First, the benchmark total output figures are extrapolated using
the appropriate value index to obtain estimates of total output
at current prices (TOCP).
-Next, the appropriate input-output ratio (derived from the
2004 economic census) is applied to the total output to estimate
intermediate consumption (IC) at current prices.
-Finally, the IC is subtracted from TOCP to give the gross value
added at current prices (GVA CP).
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Estimating GVA by activity at 2004 constant prices
 Estimating GVA at constant prices for most activity is done by a
direct method.
This method is simply to extrapolate the benchmark GVA using
the appropriate quantity index. That is equivalent to
extrapolating the benchmark total output by the quantity index
and applying the benchmark input-output ratio in every year to
derive the GVA.
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Data sources and compilation
Agriculture
Crop Production
 Sources: Data on quantities and prices for each of the main crops grown in the
Gambia are obtained from the Ministry of Agriculture through their annual
National Agricultural Sample Survey (NASS); Data on horticultural products were
obtained from the Economic Census but for 2004 only;
 Method:To derive the current price estimates, the quantity of crops produced in
each year (in metric tonnes) is multiplied by its’ relevant unit price collected from the
Consumer Price Index (CPI). This is summed and converted to a value index of
which is applied to the total output for crops in the base year (2004). At constant
price, estimates are derived by applying the 2004 prices to the quantity figures for
each year. It is then summed, converted to a volume index which is applied to the
total output of the base year. Intermediate consumption (IC) at current and constant
prices for all years are derived by applying the factors for the 2004 benchmark
estimates.
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Data sources and compilation cont’d
Livestock
 Sources: Department of Livestock Services and the (National Agricultural
Sample Survey report (NASS) provide figures on number of livestock by
type.
 Method: At constant price: The quantities for each type of animal are
converted to a volume index with the year 2004 made equal to 100. An
overall volume index is then derived as the simple average of the indices
for each type of animal and is used to extrapolate the current year figure.
At current price: A similar approach is used to derive an overall price
index for livestock. That is, a unit price for each type of meat is converted
to a price index based on 2004. An overall price index is thus obtained as a
simple average of the individual indices which is applied to the quantity
index and used to extrapolate the current year’s estimates.
20
Data sources and compilation cont’d
Forestry
 Sources: The 2003/04 Integrated Household Survey (IHS) provided
data on fuel wood and charcoal consumption; The Department of
Forestry provides estimates of revenues collected for the various types
of forestry products.
 Method: At current price: output of the forestry sub-sector for
2004 is based on household expenditure on forestry items derived
from the 2003/04 HIS and for subsequent years’ based on revenue
collected from forestry product. At constant price: indicative
growth rates are applied in consultation with the department of
forestry.
21
Data sources and compilation cont’d
Fishing
 Sources: Department of Fisheries provides estimates on quantities of fish
catches;
 Method: At current price: the output for fish in a current year is
derived by applying the quantity index of fish catches to the CPI sub-index
for fish in the same period. At constant price: output is extrapolated
by applying the quantity index to the output of the base year. Intermediate
consumption at current and constant prices is derived using the ratio of
input to gross output for 2004
22
Data sources and compilation cont’d
Mining and Quarrying
 Source: Department of Geology provides production data for
sand, gravel and clay
 Method: At current price: total quantity for each of these
products were multiplied by its’ price prevailing in the market
to derive the value of output. Value index were constructed and
applied to the benchmark figure to derive total output for the
current year.
 At constant price: total output is extrapolated using the
quantity index of the products.
 For both current and constant price, Intermediate consumption
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is derived using the ratio of inputs to gross output for 2004.
Data sources and compilation cont’d
Manufacturing
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 Sources: Economic Census and annual data on production and sales are
collected from few large establishments engaged in manufacturing of
various products
 Method: At current price: the gross output and intermediate
consumption were obtained from the Economic Census benchmark
year (2004). Subsequent year’s estimates are based on annual turnover
of these establishments and are converted to value index. Total output
for each year at current price is then extrapolated using the value
index. At constant price: total output is derived by deflating with the
CPI.
 For both current and constant price, Intermediate consumption is
derived using the ratio of inputs to gross output for 2004.
Data sources and compilation cont’d
Electricity andWater
 Sources: The annual accounts and reports of the National Water
and Electricity Company (NAWEC).
 Method: At constant price: total output is derived by applying
the quantity index for both electricity & water to the benchmark
output value. At current price: total output is derived by
multiplying the constant value estimates with the CPI sub-index
for electricity & water.
 For both current and constant price, Intermediate consumption is
derived using the ratio of inputs to gross output for 2004.
25
Data sources and compilation cont’d
Construction
 Sources: Data is obtained for quantities and value of imports on
construction materials from the external trade unit of GBoS.
 Method: At current price: total output for each year is extrapolated
with the value index for imports of construction materials.
At constant price: the output of current price series is deflated
with the all item CPI.
26
Data sources and compilation cont’d
Wholesale & Retail Trade

Sources: Ministry of Finance fiscal tables data on domestic taxes,
taxes on international trade and excise duties is extracted.
 Method: At
current price: for the years 2005-2009 estimates are
based on the value index of domestic taxes, taxes on international
trade and excise duties. For the most recent years, estimates are
based on changes in the sum of imports of goods and gross output for
the agriculture, fishing and manufacturing industries. The
constant price estimates are derived by deflating the current
price by the all item CPI.
27
Data sources and compilation cont’d
Hotels & Restaurants
 Sources: Data on the number of tourists visiting the Gambia
annually is provided byThe Gambia Tourism Board.
 Method: At constant price:
The quantity index of the total
number (for the total number of tourist visiting each year) is applied to
the benchmark. At current price: output is derived by applying
the quantity index and the CPI sub-index for hotels & restaurants to
the benchmark;
 For both current and constant price, Intermediate consumption is
derived using the ratio of inputs to gross output for 2004.
 GVA estimated as Gross Output minus Intermediate Consumption.
28
Data sources and compilation cont’d
Transport & Storage
 Sources: Economic Census, police headquarters, GBoS Transport Unit
 Method: At constant price: output is derived by applying the
quantity index (of the total number of registered commercial vehicles) to
the benchmark; At current price: the CPI sub-index for transport
is applied to the benchmark
 For both current and constant price, Intermediate consumption is derived
using the ratio of inputs to gross output for 2004.
 GVA estimated as Gross Output minus Intermediate Consumption.
29
Data sources and compilation cont’d
Communication & Postal Services
 Sources:
The Gambia Telecommunications Company Limited
(GAMTEL) and four other GSM cell phone operators
 Method: At constant price: output is derived for 2005-2008 by
applying the volume index of fixed landlines to the benchmark. For
recent years the volume of call minutes for fixed lines and GSM was
applied. At current price: output is derived by applying the quantity
index and the CPI sub-component for communication to the
benchmark.
 For both current and constant price, Intermediate consumption is
derived using the ratio of inputs to gross output for 2004.
 GVA estimated as Gross Output minus Intermediate Consumption.
30
Data sources and compilation cont’d
Finance & Insurance
 Sources: Data is provided by the Central Bank of the Gambia
on the annual profit & loss statement of the commercial
banks and Insurance companies.
 Method: At current price: Gross output is derived as net interest
income plus fees and charges for specific services; at constant price: it
is deflated by the overall CPI to derive output. For insurance industry,
output at current price is equal to the gross premium; this is also
deflated with the overall CPI to derive the constant price.
 Intermediate consumption at current and constant prices is calculated
for the combined financial intermediation and insurance industry using
the ratio for the year 2004.
31
Data sources and compilation cont’d
Real Estate, Renting & Business Activities:
 Sources: : Economic Census, the Integrated Household survey (IHS).
 Method: The constant price estimates for the real estate, renting
and business activities, output is derived by applying growth in the
size of the population to the 2004 benchmark estimate. The current
price estimate for gross output is then obtained by applying the
housing sub-component of the CPI to the volume estimates.
 Intermediate consumption at current and constant prices is calculated
using the ratio for the year
32
Data sources and compilation cont’d
Public Administration
 Sources: The main source of data is from the Ministry of Finance’s
Fiscal table and the Directorate of Treasury.
 Method: : Output at current prices for the 2004 benchmark to
date is derived from Government’s fiscal table; it is equal to total
government expenditure on wages and salaries. The constant
prices estimates are derived by applying growth in the total
number of employees in the civil service to the 2004 base year
value (excluding staff in the education and health sectors).
33
Data sources and compilation cont’d
Education
 Sources: Budget document from the Ministry of Finance
 Method: The constant price estimates for education is derived
by applying growth in the number of employees in the education
sector. The current price estimates is then derived by applying
the CPI sub-component for education to the corresponding
volume estimates.
34
Data sources and compilation cont’d
Health & Social Work
 Sources: Budget document from the Ministry of Finance
 Method: The constant price estimates for health is derived by
applying growth in the number of employees in the health sector.
The current price estimates is then derived by applying the CPI
sub-component for health to the corresponding volume
estimates.
35
Data sources and compilation cont’d
Other Community, Social & Personal Services
 Sources: Budget document from the Ministry of Finance
 Method: The constant estimates for the other community, social
and personal services industry is derived by applying growth in the
size of the population to the 2004 benchmark estimate for gross
output. The current price estimate for gross output is then
obtained by applying the CPI sub-component for recreation to the
volume estimates.
 Intermediate consumption at current and constant prices is
calculated using the ratio for the year 2004.
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ADJUSTMENTS
 For FISIM, the current price estimates are the actual figures
reported by the Central Bank of The Gambia and taken to be the
net-interest income. The constant estimates for FISIM is
derived by deflation using the total CPI.
 Taxes less subsidies on products: Taxes on products at current
prices is obtained from the finance ministry’s fiscal table were
figures for sales tax, excise duties and taxes on international trade
are extracted. The volume estimates are derived by applying the
growth in total value added at constant prices to the 2004
benchmark estimate.
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THE EXPENDITURE APPROACH
 Household final consumption (HFC)
The estimate was derived from the Integrated Household Survey
report for the benchmark year of 2004.
 Non-profit Institutions Serving Households
Derived from the Economic Census data for the benchmark year,
2004.
38
The Expenditure Approach Cont’d
 Central Government consumption
Obtained from corresponding budget documents for all the years.
Gross fixed capital formation (GFCF)
The census collected data on establishments’ acquisitions of GFCF.
As part of the census reprocessing, these figures were grossed-up
for all of the industries for which production data were available.
For the few industries without any figures for GFCF, estimate of
capital formation were assumed to follow rates of the responding
establishments. In addition, GFCF figures for central government
were extracted from the budget statement for 2004.
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The Expenditure Approach Cont’d
 Changes in inventories
Estimates for changes in inventories have been produced
from the economic census.
Exports less imports of goods and services
The imports and exports are obtained from GBoS and,
data pertaining to two-way flow of services were
obtained from the Central Bank of The Gambia.
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CONCLUSION: Constraints & Challenges

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Producing a revised national accounts and CPI series, there still exists a number of
critical issues hampering the effective production of annual GDP estimates,
among these :
Low level capacity/academic qualifications of the current statisticians involved in
compiling/producing annual GDP estimates;
No focus on routine data collection and as a result there are data gaps in some sectors;
The lack of resources to undertake annual establishment surveys and the maintenance of
a comprehensive business register (to serve as a frame for subsequent economic surveys) makes
it difficult to properly maintain regular economic series;
Weak coordination of the National Statistical System, poor communication with
stakeholders – sharing information problems especially from some sectors responsible
for data collection for inputs into GDP; e.g. agriculture
Way Forward-NSDS II
 There is a need for constant training and capacity building in national accounts
and economic statistics related subjects for the staff of this unit.(both short and
long term);
 The need to secure sustainable funding – (from the Government of The Gambia as
well as from Development Partners), to put in place an annual data collection
exercise for the manufacturing and construction activities, wholesale &
retail trade, hotels & restaurants, real estate and other business activities;
 To put in place a comprehensive list of business establishments to be used
as a frame for subsequent economic surveys and it should be constantly
updated;
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Way Forward
 The cost of tools and implements used in agricultural production as well
as farm-gate prices for various crops should be collected requiring the
expansion in the coverage of the Producer Price Index. This will enable
the national accounts unit to apply double-deflation method for
compilation of Value Added for agriculture in conformity with
international standards;
 Efforts have to be made to also collect livestock figures directly from
farmers, animal slaughters in the abattoirs as well as those exported regular livestock surveys is to be carried out by the Department of
Livestock Services;
 Conduct an intensive data collection of indicators on Forestry products;
 Finally, conducting another phase of an economic census is very crucial
to improving the annual GDP estimates as well as provide a new
benchmark which should be in line with the 2008 SNA.
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End of Presentation
Thank you for your attention
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