1. Dr. Maxwell Musongole and Shebo Nalishebo Seminar on Developing a Programme for the Implementation of the 2008 SNA & Supporting Statistics in Southern Africa Pretoria, 17-19 October 2012 Republic of Zambia Republic of Zambia Central Statistical Office

2. Outline  Overview of the main policy issues & their relationship with the scope and detail of the national accounts framework;  Overview of current national accounts compilation practices;  New requirements by economic activity and institutional sector; and  Statistical and institutional actions to remedy shortcomings

3. Overview of policy issues  Zambia has undergone 3 ‘policy periods’:  Free market policies (1964-1972)  State control (1973-1991)  Economic liberalisation

4. Overview of policy issues  Zambian government’s policy objectives are set out in:  Vision 2030  Sixth National Development Plan (2011-2015)  Medium term expenditure framework  Annual budget speech  Macroeconomic objectives (2011-2015):  Attain real GDP growth of at least 7 percent per annum; [averaged 6.5% last 5 years]  Reduce inflation to 5 percent by 2015; [currently above 6 %]  Raise domestic revenues to at least 20.0 percent of GDP; [2013 budget target >25%]  Reduce domestic borrowing to 1.0 percent of GDP by 2015;  Maintain and sustain a sustainable current account position;  Create at least 1 million new jobs by 2015; [200,000 new jobs per year]  Reduce lending rates;

5. Overview of policy issues  Fiscal policy:  budget forecasts determined on the basis of value of GDP  Revenue, expenditure & grants targets, deficits, domestic debts, determined as a percentage of GDP  Per capita GDP/GNI: used as a human development indicator  Have since moved from low income to middle income country  Other policies informed by national accounts: agriculture, manufacturing, ICT

6. Shifts in economic structure 1964-19721973-19911991-20002001-2011 Agriculture, hunting, forestry, fishing (ISIC A- B) 13.3 16.0 19.7 20.2 Mining, Utilities (ISIC C+E) 32.9 19.1 12.3 6.4 Manufacturing (ISIC D) 13.2 23.5 17.7 9.9 Construction (ISIC F) 7.9 4.6 3.8 12.9 Wholesale, retail trade, restaurants and hotels (ISIC G-H) 12.3 13.9 16.3 19.3 Transport, storage and communication (ISIC I) 4.3 4.9 5.2 4.7 Other Activities (ISIC J- P) 16.0 18.1 24.9 26.5 Total Value Added 100.0

7. Exhaustive measure of economic activity  The national accounts are not exhaustive to meet certain policy needs  Data collection was easier during the period of state control  Only GDP by industry & expenditure are compiled, no GDP by income approach  Informal activities not adequately covered for the non-agriculture sector  Own-account production & housing not adequately covered  Local government statistics inadequate – general government statistics not properly consolidated  Not sensitive to new economic activities (based on 1994 base year that may not depict current economic activities)  GNI up to saving compiled; net lending/borrowing not compiled  No satellite accounts compiled; so targeted programmes/policies on tourism, for example, not informed by national accounts statistics

8. Domestic & external economic & financial vulnerabilities  External:  Copper prices fluctuations  Oil prices fluctuations  Instability in international food prices  Slow down in world economic growth  Exchange rate instability  Eurobond

9. Domestic & external economic & financial vulnerabilities  Internal:  Drought  Food price rise (food shortage): food inflation  General inflation (exchange rate volatility)  Govt excessive borrowing; govt debt  Eurobond (pressure on debt servicing)  Inadequate data to base decisions on  Inadequate infrastructure – ICTs, hospitals, schools, etc.  Power deficits  Interest rates (bank rates still high)  Unemployment [overall: 7.9%; unemployment (20-24 yrs): 15.3% (37.8 % in urban areas]

10. Availability of short term statistics  Daily: Exchange rates  Fortnightly: monetary & financial statistics  Monthly: CPI; employment statistics from administrative sources (Zambia Revenue Authority); volume indicators for mining, construction, accommodation, etc.  Quarterly: Index of Industrial Production, Balance of Payments, formal sector employment

11. Global production issues  Issues related to goods for processing, merchanting & intellectual property products not addressed in the current framework

12. Current national accounts compilation practices  National accounts are compiled by the Central Statistical Office, a department under the Ministry of Finance  GDP is compiled annually by the production & expenditure approaches  Official GDP is compiled using the production approach  GDP produced at both current and constant prices; only current prices for expenditure approach  Statistical discrepancy reported between the two approaches  Current base year: 1994  Three releases of GDP for a particular year: preliminary, revised and final estimates  Industrial classification followed is ISIC rev. 2;  Changeover to ISIC rev. 4 in national accounts compilation planned for 2013; already implemented in the 2011 register of establishments  CPC not used;  To be introduced in 2013 as it has been incorporated in the 2012 Economic Census  COICOP for household final expenditure, COFOG for government final expenditure used  Household final consumption previously compiled as a residual; now based on data from the household budget module of the Living Conditions Monitoring Survey

13. Current national accounts compilation practices  NPISH not compiled separately  Gross Capital Formation compiled but reported at aggregate level;  Balance of goods and services compiled based on BoP data  Supply & use tables & institutional sectors not compiled  Institutional environment:  Legal framework: Census & Statistics Act, Bank of Zambia Act  Economic Statistics committee; BoP committee;  MoUs between CSO & Revenue Authority, CSO & Pensions Authority, ZICTA

14. Current national accounts compilation practices  Statistical production process:  Use GDDS framework  Developed new register of establishments (2011)  Use a combination of administrative & survey data  Dissemination of statistics done every last Thursday of the month

15. New requirements  Changeover to 2008 SNA:  Within the framework of the Economic Census project  Review of economic statistics (price & volume indicators used) – IMF missions  Business register developed (both enterprise & establishment levels)  Training in benchmarking & input-output analysis conducted for 3 members of staff in the Netherlands  FISIM & its allocation – work currently going on  Industry classification: ISIC rev. 4 implemented in population census, economic census, labour force survey  Product classification: CPC introduced in 2011/12 economic census  Prices: CPI rebased to 2009; plans to compile PPI (included in 2013 budget; will require technical assistance)

16. New requirements: Economic Census  Two phases: listing phase and enumeration phase  Listing phase implemented 4 th quarter 2011; comprehensive establishment register developed, and based on ISIC rev. 4 classification  Used as sampling frame for enumeration phase  Enumeration phase completed mid-October 2012  Industry-specific questionnaires designed to be 2008 SNA compliant  Ancillary activities with separate accounts accounted for separately as establishments; treatment of head office; etc.  Expected outputs:  Short term: 2010 benchmark & base year; provincial GDP;  Medium term: quarterly GDP, SUT/IOT, institutional sector accounts

17. Institutional actions  Hinges on the implementation of NSS within the NSDS framework  Revision of the Census & Statistics Act (currently 1964)  Technical assistance to review data collected from Economic Census: IMF Afritac South Mission (November 2012); Micromacro (December 2012)

18. Thank You!