Comments and suggestions on Chapter 5: Supply table of the Handbook on Supply and Use Table (SUT): Compilation, Application, and Good Practices (draft, October 2011) Addis Ababa, Ethiopia, October By DEFFO Achille Carlos National Institute of Statistics – Cameroon Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Definition of Supply Table The SNA 2008 (14.13) define the supply table as: “a rectangular matrix with the rows showing the kind of product produced by domestic industries and supplied by the rest of the world and columns corresponding to the supply from domestic production valued at basic prices plus columns for imports (c.i.f.) and the valuation adjustments (trade and transport margins, and taxes less subsidies on products, and c.i.f./f.o.b. adjustment) necessary to have total supply of each product in purchasers' prices” 2Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Content of chapter 5: Supply Table Chapter five addresses the definition and measuring of production and relates aspects Production boundary Distinction between output and sales Evaluation of governments’ and NPISH as the “cost of production” Output of wholesalers and retailers that corresponds to trade margins 3Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Content of chapter 5: Supply Table Bank and insurance output Relation between the basic prices and purchasers’ prices Adjustment for transport costs and trade margins and c.i.f./f.o.b. adjustment Adjustments for purchases abroad by resident and purchases in domestic market by non- resident Taxes and subsidies on products 4Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Comments and suggestions All the components of the supply table are presented in a simple and clear manner But the chapter 5 seems more theoretical and less practical Sources of information and methods of calculation are not given for each element 5Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Comments and suggestions Production boundary is broadly and clearly presented But the definition of production has to be recalled first The SNA2008 (1.40) define production as: “a physical process, carried out under the responsibility, control and management of an institutional unit, in which labor and assets are used to transform inputs of goods and services into outputs of other goods and services. All goods and services produced as outputs must be such that they can be sold on markets or at least be capable of being provided by one unit to another, with or without charge” Production boundary 6Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Comments and suggestions Valued as the “cost of production”: COE + IC + CFC + OS + TLS The problem of measuring consumption of fixed capital (CFC) in absence of information on the stock of fixed assets of governments in many African countries is not addressed by chapter 5 Necessity to present the methods that are used by different countries (African, Asian and Latina American) Gross output of governments and NPISHs 7Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Comments and suggestions It corresponds to the margins that are defined as “the difference between the value of goods sold and the cost of purchasing those same goods” “at the time they are sold” But the chapter doesn’t address the problem of measuring the second element the above definition In practice, this element is often neglected by national accountants Output of wholesalers and retailers 8Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Comments and suggestions Output of wholesalers and retailers 9Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Comments and suggestions Should be estimated for each product in the supply table In practice, national accountants get information only on the total amount of taxes and subsidies The handbook should presents methods commonly used to breakdown this amount by product Taxes and subsidies on products 10Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Comments and suggestions Margins occupy a dual place in the SNA framework: as the production of a service and as an element of valuation Example in figure 4 (p. 43) can lead to confusion about transport services Transport services are made up of transport of passengers as well as transport of goods Adjustment for transport costs and trade margins 11Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Comments and suggestions Not all the production of transport services corresponds to transport margins, contrary to trade margins which corresponds exactly to the production of wholesale and retails services Total Supply at Purchasers’ Prices at the line corresponding to “Transport services” will not be null in general, like it is the case in figure 4 Chapter 5 should highlight that point in figure 4 Adjustment for transport costs and trade margins 12Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Comments and suggestions Adjustment for transport costs and trade margins 13Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)

Thank You For Your Kind Attention 14Expert Group Meeting on Supply and Use Tables (SUTs) in support of the International Comparison Program (ICP)