ZAMBIA COUNTRY PRACTICE IN COMPILATION OF ECONOMIC STATISTICS Republic of Zambia Central Statistical Office “PAPER PREPARED BY SHEBO NALISHEBO AND PETER MUKUKA TO BE PRESENTED AT SEMINAR “TOWARDS IMPLEMENTATION STRATEGY FOR INTERNATIONAL STANDARDS ON ECONOMIC STATISTICS” 6-9 JULY, 2010 PORT LOUIS, MAURITIUS

Presentation Outline Overview of Zambia Organisational structure of the CSO Economic Statistics Division  National Accounts  Industrial Production  External Trade and Balance of Payments  Living Conditions Monitoring  Prices and Consumption Studies  Public Finance Sources & Estimation Methods Dissemination of economic statistics Short comings Constraints

Zambia - Geography

Zambia - Demographics Surrounded by 8 other countries Total area: 752, 000 km 2 Populated by 12 million people Copper remains the main export (80 %) Economic growth rate: 6.4 % (2009) Inflation rate: 7.8 % (June 2010)

Organizational Structure of the CSO The Central Statistical Office is one of the TEN Departments under the Ministry of Finance and National Planning (MoFNP) Mandated under the Census and Statistics Act of the Laws of Zambia to produce official national statistics These include:  Population and housing census (conducted every ten years)  Economic Census (to be carried out every five years)  Census of Agriculture  Other periodical national social and economic surveys The CSO consists of the Head Office in Lusaka and provincial offices in each of the nine provinces of Zambia Headed by a Director and is divided into four divisions each headed by a Deputy Director

Organizational set up DIRECTOR ECONOMICSOCIALAGRICULTURE IT& DISSEMINATION

Economic Statistics Division DEPUTY DIRECTOR NATIONAL ACCOUNTS EXTERNAL TRADE INDUSTRIAL PRODUCTION PRICES & CONSUMPTION STUDIES PUBLIC FINANCE LIVING CONDITIONS

National Accounts Branch Responsible for the compilation of GDP on an annual basis Carry out establishment-based income accounting surveys (National Income Inquiry)

External Trade and BoP Responsible for the production of merchandize trade statistics. This is done on a monthly basis with a one- month time lag. Also supplies trade data to National accounts branch for purposes of production of expenditure GDP. Balance of Payments statistics, however, are compiled at the Central Bank [‘Gentleman's’ Agreement]

Industrial Production Branch Responsible for the compilation of the quarterly Index of Industrial Production  Covers mining, manufacturing and electricity Census of Industrial Production

Prices Branch Responsible for the compilation of the Consumer Price Index used to calculate inflation Compiled on a monthly basis Most timely-produced economic indicator: disseminated every last Thursday of the reference month Provides indices for use in the deflation of GDP

Public Finance Branch Responsible for the compilation of Government and quasi-government Financial Statistics Functional and economic classification of general government expenditure Secondary collection and compilation of monetary statistics

Living Conditions Monitoring Branch Conducts the Living Conditions monitoring survey every other year Used for computation of poverty estimates and poverty maps Updating of CPI weights Direct measurement of Household Final Consumption Expenditure

Data Sources National Accounts Branch The primary sources of data for the compilation of GDP include:  Census of industrial production covering mining, manufacturing and electricity  Census of Construction  National Income Inquiry covering the services sector  The Government accounts for community, social and personal services and government final consumption expenditure.  The 1993/1994 Household Budget Survey (HBS) for estimating household final consumption expenditure and the informal sector.  Imports and exports from the External Trade statistics and transactions with the rest of the world from Balance of Payments statistics.

Data Sources Secondary sources for GDP compilation: use of volume and price indicators  Annual crop forecast and post-harvest surveys  Quarterly index of industrial production  Consumer Price Index  Turnover from VAT register

Data Sources External Trade statistics  Main data source is customs data from the customs and exercise division.  Non-Customs sources (e.g. electricity and crude oil)  Monthly survey of major importers and exporters for data verification Industrial Production statistics  Data obtained directly from a sample of establishments in 4 provinces (for the quarterly Index of Industrial Production)

Data Sources Prices statistics  About 15, 000 price quotations obtained on a monthly basis from nearly 2, 000 retail outlets throughout the country Public Finance statistics  Data obtained from annual financial reports on income and expenditure of government, and quasi-government institutions

Data Sources Living Conditions Statistics  Data obtained directly from household surveys  Indicator monitoring survey conducted every two years  Longitudinal survey with HBS module planned to be undertaken every five years

Compilation methods Economic statistics compilation based on internationally recognized methodologies  1968 & 1993 SNA, BPM5, 2001 GFS Manual, etc. Classifications used include:  ISIC Rev. 3, HS, SITC Rev. 3,COICOP  Plans are underway to implement ISIC Rev. 4 for the upcoming Economic Census, COICOP for CPI

Dissemination The Monthly bulletin, released every last Thursday of the month through a press briefing Monthly CPI press releases Website: Publications: External Trade, National Accounts Soft copies by request

Users Users are invited to dissemination fora User-producer workshops held before surveys are carried out to take their concerns on board Mixed reactions Some users are very supportive Statistics may still be misunderstood, so some express dissatisfaction

Shortcomings in NA compilation Remote benchmark year (1994) Outdated weights for deflators No appropriate volume indicators for trade, business and personal services There are a lot of small-scale operators in these industries Coverage of informal sector was only at the benchmark year No current price estimates for private consumption; derived residually

Shortcomings For External Trade:  Quantity data from customs sources poor  No Trade indices produced (e.g. unit value indices, unit price indices) due to poor quantity/price data. Industrial Production  Census of Industrial Production not conducted regularly  Outdated weights Public Finance  Poor coverage of local government sector

Shortcomings Prices:  Outdated weights (1994)

Industry The classification used for industries is the ISIC rev. 2 Rev. 3 was implemented when the 2003 enterprise surveys were carried out [yet to be incorporated] For the Economic Census, rev. 4 will be used

Industry GDP is reported using three major sectors:  Primary  Secondary, and  Tertiary Under the primary sector:  Agriculture, forestry and fishing  Mining and quarrying

Industry Under the secondary sector  Manufacturing  Construction Under the tertiary sector  Trade  Hotels, bars and restaurants  Transport and communications  Financial intermediation and insurance  Real estate and business services  Community, social and personal services

Agriculture Primary data source: (Census of Agriculture) Secondary data source: Annual Crop forecasting survey & Post harvest survey Agriculture season: Oct 1 – 30 th Sep Output recorded in the year of harvest Broken down into crops, livestock and vegetables & fruits Weights: Crops (60%); livestock (30%); fruits & vegetables (10%)

Forestry & Fishing Data on forestry obtained from the Department of Forestry Number of logs in cubic metres Alternate sources: Forestry establishments Data on fish catches in metric tonnes obtained from 11 major fishing areas across the country

Mining and quarrying Industry broken down into metal mining and Other mining and quarrying Metal mining consists of copper and cobalt production Other mining includes coal mining and stone quarrying Mineral export index used as deflator

Manufacturing Data obtained from Census of Industrial Production and the quarterly Index of Industrial Production Scope:  Food, beverages and tobacco  Textiles, clothing & footwear  Wood and wood products  Paper & paper products  Chemicals, rubber & plastics  Non-metallic mineral products  Basic metal products  Fabricated metal products

Electricity & Water KWh of electricity generated by Zambia hydro power stations and diesel stations Hydro stations generate 99 % of total electricity Water data from Water regulatory body

Construction Primary data source: Census of Construction Secondary indicators: Input indicators used to estimate output  Cement sales  Stone quarrying Index of building materials used for deflation

Trade, Business & Personal Services No direct indicators used for these sectors Trade industry assumes output from Agriculture, manufacturing and imports of consumption goods are disposed of through trade Business services follows the same trend as Trade Personal services follow the same trend as Business Services

Hotels & Restaurants Bed occupancy rates used; obtained from the Ministry of Tourism Bars and restaurant data obtained indirectly from the Food, Beverages and Tobacco sub- sector under Manufacturing

Transport & Communications Transport broken down into:  Rail transport (data on number of passengers & tonnage of haulage obtained from 2 firms)  Road and pipeline transport (passenger & cargo hauled; registered public service vehicles)  Air transport (passengers embarking & disembarking at the 4 main airports) Postal and telecommunications services

Financial institutions & Insurance Employment FISIM Number of policies issued

Real estate & business services Real estate: urban population growth rates Business services: assumed to have the same trends as Retail Trade

Community, social & personal services Data mainly for government sector Uses costs (Intermediate consumption, compensation of employees) to estimate output Data obtained from Public Finance unit which gets it from Budget Office Personal services assumed to follow the movements of Business Services

Constraints Budgetary constraints in other government agencies affects production of statistics (e.g. tourism, fisheries, local authorities) Poor quality customs quantity data Outdated and Weak Statistics Act

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