17-19 October 2012, Pretoria, South Africa Towards Implementation of the 2008 SNA in Africa: Importance, Challenges, and Road Map Xiaoning Gong Chief, Economic Statistics and National Accounts Section African Centre for Statistics (ACS) United Nations Economic Commission for Africa (UNECA) at Seminar on Developing a Programme for the Implementation of 2008 SNA and Supporting Statistics in Southern Africa, 17-19 October 2012, Pretoria, South Africa

Presentation Outline Importance of the System of National Accounts (SNA) Current Status of SNA in African Countries Road Map towards Implementation of SNA 2008

Importance of SNA National Accounts are, arguably, one of the most important modern tools of economic analysis and policy making: Systematic and strong base of macroeconomics Application of double-entry accounting principle International standard methodology Mathematization and computerization of the work Complete picture of whole economic process High relevance and orientation of current policies At least four Nobel Prices in economics were awarded to persons who contributed to the development of NA: Simon Kuznets, Richard Stone, Wassily Leontief, and Jan Tinbergen. Application of macro-econ: The Great Depression and the Second World War rekindled interest in macroeconomic theorizing. Most importantly, the work of Keynes (especially his General Theory) was accepted as guiding by most of those working on the new systems of national accounting. Double entry bookkeeping technique goes to the heart of the new system. The systematic application of modern tenets of macroeconomic theory to NA seemed to require the introduction of the DEB. It permits relating flows of expenditures to incomes, production to consumption, or savings to investments. Increased policy orientation: Policy needs for aggregate economic measurement. The two outstanding demands came from the calamities of the Great Depression and the Second World War both of which engulfed most countries in a profound way. Portrayal of the whole economic process: It is comprehensive and detailed. National accounting work today provides for the relating of all such macro-econ efforts to each other. Internationalization of methodological development: Since WWII, it witnessed unprecedented international interaction and cooperation in respect of developing national accounts. Mathematization and computerization of the work: input-output system of Wassily Leontief and the econometric work of Jan Tinbergen. Computers became all pervasive and an integral part of statistical works on national accounting practically everywhere.

Importance of SNA: Chinese GDP in USD

Current Status of SNA in African Countries Limited Human, Financial, and Technical Resources Weak Capacity and Statistical Infrastructure Unharmonious National Accounts Systems in the Continent Inconsistency and Incompleteness in the Data Coverage of the Economy Early Stages in the Development of National Accounts

Limited Human, Financial, and Technical Resources National Accounts in Africa is mainly compiled by National Statistical Offices (89%) Other Ministries & Central Banks (11%) Average number of NA Statisticians per country = 8 High turnover rate: 4 professional staff have left from the NA Department in the last five years Half of the countries: “Number of PC available in NA Department” < “Number of National Accounts staff”

Weak Capacity and Statistical Infrastructure Relied mostly (60%70%) on Administrative Records to meet the minimum requirement datasets for National Accounts Analytical capacity, dissemination, and networks with users and respondents: On average, it takes 5 months to release the first estimate The final estimate takes around 17 months Advance release calendar exists only in about half of the countries

Unharmonious National Accounts Systems in the Continent ISIC SNA CPC

Inconsistency and Incompleteness in the Data Coverage of the Economy According to ICP-Africa 2005, the following areas have not been well captured: Imputed rents of owner-occupied dwellings Own-account production and consumption Informal sector Non-profit institutions and civil societies State and local government, and Aid agencies

Early Stages in the Development of National Accounts 20% of the total African countries have reached only to Milestone 1: Basic Indicators of GDP at Current and Constant Prices; Final Expenditures on GDP and GDP by Industry. 65% have so far reached to Milestone 2: to produce additional economic aggregates of GNI, and other primary indicators; External Account of Primary Income and Current Transfers, Capital and Financial Accounts for the Rest of the World. 15% (eight) African countries have reached to Milestone 3: Production Account for All Institutional Sectors; while Income Accounts, Capital Accounts, and Financial Accounts for General Government.

Road Map towards Implementation of SNA 2008 SNA Regional ProDoc: Scheme Contents of main activities and Roles played by AGNA members

SNA Regional ProDoc: Scheme Institutional Strengthening Advocacy Campaign Methodological Development Training Technical Assistance Monitoring, Evaluation and Reporting

Methodological Development To develop a set of manuals/handbooks/guides for implementation of SNA 2008 To discuss and find solutions for technical issues and challenges in the implementation of SNA 2008 in Africa To be carried out by Task Force Teams of AGNA Methodological Development Countries RECs Pan-African Inst. 13

Capacity Building: Training Self-training of AGNA through Task Teams working on technical issues Regional seminars/workshops/meetings to disseminate Manuals/Handbooks/Guides Training of national accountants at national levels by AGNA members Training Countries RECs Pan-African Inst. 14

Capacity Building: Technical Assistance Provided by Pan-African Institutions, RECs, Regional National Accounts Advisors upon the request of Member States To countries: lagging behind in the implementation of the 1993 SNA, ICP Africa 2005 non-participating countries, and Fragile and Small Developing countries Technical Assistance RECs Pan-African Inst. 15

Institutional Strengthening Through AGNA, to establish commonly agreed timelines, procedures, and standards in the Continent, e.g.: To compile NA statistics according to timeline in respect of the national, sub-regional, and regional requirements To optimize and rationalize production and analysis of NA To develop training programs and modules of NA To set up national accountant’s profile Institutional Strengthening Countries RECs Pan-African Inst. 16

Advocacy Campaign To organize advocacy at continental, sub-regional, and national levels: e.g. through DG meetings, Conference of Ministers, Summits of Heads of States, and parliaments Prepare advocacy materials and tools to publicize and sensitize the usefulness of NA statistics in policy- and decision-making for governments and publics Advocacy Campaign Countries RECs Pan-African Inst. 17

Monitoring, Evaluation and Reporting To develop tools, framework, and procedure of and to carry out monitoring, evaluation and reporting activities for the implementation of the 2008 SNA It is to be conducted by Pan-African Institutions, RECs, and Member States at the Continent, sub-regional, and national levels Peer review among countries Monitoring, Evaluation and Reporting Countries RECs Pan-African Inst. 18

Summary Importance of the System of National Accounts (SNA) one of the most important tools of economic analysis and policy making Systematic application of macroeconomic theory Portrayal of the whole economic process Current Status of SNA in African Countries Limited resources and weak capacity Not harmonious and inconsistent and Incomplete Coverage At an early stage of the development of national accounts Road Map towards Implementation of SNA 2008 Six activities and Work together by sharing responsibilities among AGNA

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