CHAPITER 12 Individual and collective services AFRISTAT Expert Group Meeting Hand book on SUT: Compilation, Application, and Good Pratices Otober 2011 Kaleb Hotel, Addis Abeb, Ethiopia

Summary  Concepts  Practical : How practical is the Chapter?  Applicable : How applicable is the Chapter to countries in Africa?  Good practice : What is your view on the good practical examples and/or cases in the Chapter?  Suggestion  Conclusion

 individual and collective services introduced by 1993 SNA  Household consumption more than their own consumption expendures Why?  Because of individual consumption expenditure by Non Profit Institutions serving Household (NPISH) and individual consumption expenditure by government (the example of pregmant woman with consultation :government paid health workers is very interesting) Concept 1/4

Concept 2/4 Household actual consumption is very acurate, correct than consumption expenditure individual services are the services that government provides to specific identifiable households such as health and education, which are consumed by individual households. Any service not individual by government is called collective service (defense, order public and security

Concept 3/4 What is very interesting in this chapiter is the caracteristic of individual and collectives consumption by government. Individual services Production of serviceExample: Hospitals and schools Purchase of goods and services by governments (free or at prices below the costs of production) Example: Medecines or medical services Collectives servicesOnly the production of services Example: General public services, defense, public order and safet

The distinction between individual and collective services is made properly by reference to Classification of the functions of government (COFOG 1998 ). Concept 4/4

Practical : How practical is the Chapter?  concepts easy but its implementation in the countries not easy  COFOG 1998 is not effective in most countries of Africa south of Sahara  Budget data government often not sufficiently detailed to take into account all these differencies (individual and collectives services)  Collective services by Government are calculated by deduction

Practical : How practical is the Chapter?  GFCE (Governmt)=Individual + NPISH + Collective  Assumption: Gross operating surplus, Net taxes on production = Collective  Only Compensation of employees and Intermediate consumption are estimated  positions of non-market services of education and health Gross operating surplus, Net taxes on production are often misunderstood, estimated and priori deemed not applicable  usually, in the countries theses are assumed negligible or zero.

Applicable : How applicable is the Chapter to countries in Africa?  This chapter is not often applied properly.  The reason is that the concepts are new (1993 SNA).  Many countries AFRISTAT have not yet implemented fully the 1993 SNA and the estimates on these basic headings are often approximate.  Exercise is not easy (double counting error or omission)

Applicable : How applicable is the Chapter to countries in Africa? Example 1: Production of health and education services: there is compensation of employees (individual service) Collective consuption expenditure by gouvernment, there are alse compensation of employees There is sometimes a risk of double counting of workers in education and health Example 2: budget line called common expenses for all categories of goods and sectors

Applicable : How applicable is the Chapter to countries in Africa? For education, there is no level of detail requested by the PCI 2005 or PCI 2011 » Primary and pre-primary education services » Secondary education services »Post-secondary »non-tertiary education » Gross operating surplus : This line is often not understood by the country. It is misjudged and seems inadequate to non-market services in the countries of Africa south of Sahara

 Many countries take the expenditure of Ministry of health and education was individual and other government expenditure was collective  tables of passage between the Government public classification Budget and the national account classification of activities (ICP Classificaton)  Difference between economic agents to origin of certain jobs, or those who benefit (cameroun).  Good practice : What is your view on the good practical examples and/or cases in the Chapter?

 specific surveys for the evaluation of the part of individual services with the public services overall four countries that don’t implement COFOG  The rate of budget implemention is low and budget as data source may be questionnable. Good practice : What is your view on the good practical examples and/or cases in the Chapter?

Suggestion 1/2 » to encourage all African countries to implement the COFOB 1998 »to submit at the end document a conversion table between the regular budgets and PCI classifications »proposal of proxy variables are necessary for the breakdown of government consumption expenditure in individual consumption and collective consumption

Suggestion 2/2 »To indicate clearly the data sources for different positions (individual and collective). » For example, individual households: budgets consumption surveys, using the ERE. »The individual and collective services: government budget, the dashboards of public finances

Question What is the impact of the 2008 SNA on individual and collective costs by government about distinguish NPIs serving households of other NPIs as the public sector, non-financial corporations and financial companies (2008 SNA) ?

Thank You