African Centre for Statistics United Nations Economic Commission for Africa Expert Group Meeting: to review “Handbook on Supply and Use Table, Compilation,Application,and Good Practice” Presenter Elias Fisseha Economic Statistics and National Accounts Section African Centre for Statistics October 2011 Kaleb Hotel, Addis Ababa, Ethiopia

African Centre for Statistics CHAPTER 10. MINIMUM DATA REQUIRED FOR COMPILING SUT

African Centre for Statistics Outline of Presentation Overview of Supply and Use Table Data Data required for Domestic output and Intermediate Consumption by product & industry. Import and Export by product Taxes and subsidies on products and other taxes and other subsides on production Trade margins Transport cost Household consumption Expenditure Government Consumption Expenditure Consumption Expenditure of NPISH Change in Inventories Acquisition less disposal of valuables Compensation of Employees Consumption of Fixed Capital Net Operating Surplus

African Centre for Statistics 1.Overview of Supply and Use Table Data The construction of SUT is very data demanding and uses information from all sources, namely, censuses, surveys, administrative data, small scale sample survey, and expert judgments. The SUT need detailed data at product level for each component of supply and use table. However, in reality, the economic data that is available is developing countries is much less than the data required by SUT. In such situations, countries are required to use all alternative sources such as small sample surveys, borrowing ratio from neighboring countries of similar economies and use expert judgments

African Centre for Statistics 2. Data required for Domestic output and Intermediate Consumption by product & industry. The data required for total output and total intermediate consumption by industry is collected by establishment survey’s and questionnaire. But further disaggregated data might not be available in such a case. The fall back options are:  Input-Output survey covering a few establishments in each industry.  Expert opinion  Standard input structure of different industries.  Borrowing intermediate consumption coefficients from neighboring countries with similar economic structure.

African Centre for Statistics 3.Import and Export by product Import and export data comprises of both goods and services. Data on merchandised goods comes from foreign trade statistics while data on service comes from Balance of payment statistics compiled by central banks. The SNA recommends valuation of imports and exports on f.o.b basis. Export data are usually available at f.o.b. and import are at c.i.f. Therefore countries need to introduce and adjustment to convert import c.i.f to f.o.b. Another adjustment that is required to be made on import and export is the purchase of residents abroad and non-residents in the domestic economy.

African Centre for Statistics 4.Taxes and subsidies on products and other taxes and other subsides on production Data on taxes and subsidies on products and other taxes on productions are available on government budget documents and tax authorities. Data on taxes and subsidies on products is required by products, while taxes on productions and subsidies are needed by industries and can be obtained from enterprises survey and business accounts of corporations. In some countries, data on product taxes are available only at aggregate level, not with the product wise disaggregation. In such cases, countries need to estimate product tax for each commodity on the basis of average tax rate, then adjust the total product tax on pro-rate basis.

African Centre for Statistics 5.Trade margins The data on trade margins by products is mostly estimated though indirect methods. The trade margin ratio for different product can be estimated on the basis of small surveys of wholesalers and retailers. The difference between the output of the product at basic price and the input price of same product at purchasers price can be assumed to be trade and transport margin

African Centre for Statistics 6. Transport Cost The transport cost can be estimated through indirect methods. In the absence of direct product wise information on transport cost from the enterprise survey. The procedure is the same as the trade margins calculations. The Eurostat manual provides a very detailed method for indirectly estimating transport costs by products.

African Centre for Statistics 7.Household Consumption Expenditure The main data source for household consumption expenditures are the household income expenditure surveys, retail trade survey, agricultural production surveys and other administrative data. In some countries use a combination of various sources for different items of HH consumptions. For example, consumption of alcohol from the excise authorities, electricity consumption from suppliers, & consumer durable from retail sales. Concordance tables between the COICOP classification and CPC for the product need to be establish.

African Centre for Statistics 8. Government Consumption Expenditure The data required is general government purchases. The main data sources are budget expenditure document of federal government, provincial government & local governments. Concordance table has to be established between COFOG classification and the product classification CPC.

African Centre for Statistics 9. Consumption Expenditure of NPISH The data required for this component is the expenditure of NPISH disaggregated by products. The main data sources are survey on NPISH, annual accounts of NPISH. The other alternative data source could be economic censuses or annual enterprise survey in which a separate code of NPISH could be given to identify the NPISH enterprises.

African Centre for Statistics 10. Gross Fixed Capital Formation The requirement of data for this component is the gross fixed capital formation disaggregated by types of asset (Products) mainly construction and machinery. The main data sources are construction surveys, building permits, annual enterprise survey, accounts of government budget documents, foreign trade statistics and the household surveys. The alternative data source is the commodity flow methods which are based on the availability of products from domestic production and import.

African Centre for Statistics 11. Change in inventories The source of data for the change in inventories are surveys on inventories, company accounts, annual enterprise survey, agricultural surveys, food balance sheets, government budget documents and government strategic stocks of food, oil, etc. Countries that do not regularly compile estimates of change in inventories should focus on estimating inventories at least for the government and corporations from their annual accounts, which are generally available.

African Centre for Statistics 12. Acquisition less disposals of Valuables The main sources of data for estimating this components are the import and export statistics and domestic production of valuables. Import and export data comes from customs authorities, the domestic production can be estimated by identifying the establishments/enterprises associated with the production of valuables.

African Centre for Statistics 13. Compensation of Employees The most common data sources for estimating compensation of employees by industry are:-  The annual enterprises survey;  Business accounts;  Government budget documents;  Administrative data;  Labor force survey

African Centre for Statistics 14. Consumption of Fixed Capital The recommended method of compiling CFC estimates by industry is the perpetual inventory method (PIM) The PIM requires long term data on gross fixed capital formation by type of assets cross classified by industry / institutional sectors and the life cycle of the assets.

African Centre for Statistics 15. Net Operating Surplus This component can be derived as residual, as the difference between industry output and the sum of intermediate consumption, compensation of employees, consumption of fixed capital. If countries do not compile CFC estimates, then the residual becomes the gross operating surplus /mixed income.

African Centre for Statistics 16.Comments and Suggestions The chapter properly explained all direct and indirect (alternative) sources of data. Data source on output and intermediate consumption has to be reclassified into the respective industries such as agriculture, manufacturing & service instead of calling establishment survey and economic census. The uses of VAT data has to be emphasized. Numerical example which shows how to apply neighboring countries ratio has to be included. This chapter has to be in the beginning of the handbook.

African Centre for Statistics 17.Points for Discussion Is the conducting of survey for SUT purpose only advisable?.Are there any country who conduct specific survey for SUT purpose only? If we have gross trade & transport margin data, how can we allocate in to trade margin and transport cost? What are the indicators needed to allocate in to the above component? What are the challenges of reconciling administrative data with the standardized survey and census data? Country experience if any? How can we get data

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