NATIONAL ACCOUNTS IMPROVEMENTS AND 2008 SNA IMPLEMENTATION STATUS – UGANDA CASE

Samuel Echoku – Uganda Bureau of Statistics

UGANDA BUREAU OF STATISTCS

Outline of Presentation

Introduction

National Accounts data improvements

SNA 2008 Adoption Status

Rebasing challenges and future NAS improvements

IntroductionNational Accounts production dates back to 1950

First publication was made in 1957 titled “The Geographical Income of Uganda 1950-56

Second Publication made in 1961 titled “ The Gross Domestic Product of Uganda 1954-56”

Between early 1970’s to 1988 the official statistical system almost came to a complete collapse

From the late sixties to 1988 GDP measured at only constant prices

Between late sixties and 1988 (almost twenty years) the base period was 1966

Introduction Cont’d

• Rejuvenation of the National Accounts System started with the production of the 1989 and 1992 Input-Output Tables

• The 1989 and 1992 input-output tables were then followed by the 2002 SUT  

• And now the 2009/10 SUT

• In close to fifty years we’re now doing our fifth rebase of the National Accounts,

• This is our fourth rebase of National Accounts since 1988

• The 1997/98 rebase had neither input-output tables nor SUT benchmark. The major new data set at that time was only the 1997 UNHS.

Introduction Cont’d

• Since 2002 rebase the bureau has adopted the recommended Supply and Use Tables Approach for the base year benchmark data.

• Other major changes at the Bureau on NA include the

publication of the quarterly GDP which is now into its second year

NAS Improvement rebase Data

Trade and transport margins study

Non-Profit Institutions Survey

National Livestock Census – 2008

Uganda Census of Agriculture

Uganda National Household Survey 2009/10

Uganda Business Inquiry 2009/10

Income and Value Added Tax returns for 2009/10

Process Started with the development of the 2009/10 Supply and Use Tables (SUT)

SNA 2008 Status in National Accounts Rebase

Adopted SNA 2008 recommendations

Basic adjustments done towards SNA 2008 migration:

• Reclassification of Uganda Business Inquiry (UBI), external trade, VAT and other data sets into ISIC rev 4

• development of the 2009/10 Supply and Use Tables (SUT)

• In addition the UBI classified ancillary establishments according to their own principal activity,1993 SNA treated it as an auxiliary unit of the establishment it served

In SNA 2008 financial services have been enlarged in consideration of the increase in financial services other than the financial intermediation, specifically financial risk management and liquidity transformation.

We need to examine the gaps and assess the availability of data for the sub-sectors of the financial corporation sector as follows:

i. Central Bankii. Deposit-taking corporations except the central bank, iii. Money market funds (MMFs), iv. Non-MMF investment funds, v. Other financial intermediaries except insurance

corporations and pension funds (ICPFs),

Extended financial services consideration

vi. Financial auxiliaries, vii. Captive financial institutions and money lenders, viii. Insurance corporations (ICs) and ix. Pension funds (PFs). There are schemes currently in

operation beside NSSF some times they are done by commercial banks. We need the data in order to include them in the financial services

Extended financial services consideration – cont’d

Central bank output

Central bank Output treatment

Services produced by the central bank are identified in three broad groups,

i. financial intermediation, ii. monetary policy services and iii. supervisory services - overseeing financial corporations.

• For Uganda’s case we hope to retain the cost approach for measuring the output of the central bank, reasons:

i. The monetary services that represent non market production are the core function on the Bank

ii. Secondly the supervisory and financial intermediation services operations cannot be isolated from the other operations of the central bank in terms of intermediate consumption and value added

Central bank output

central bank Output treatment

i. Borderline cases, such as supervisory services may be treated as market or non-market services depending on whether explicit fees are charged that are sufficient to cover the costs of providing such services.

FISIM

UBOS follows the recommended 2008 SNA approach for computing FISIM that is:

δ calculate the output of FISIM on loans (VL) and deposits (Vd)only, using a reference rate (rr).

δ Assuming that these loans and deposits attract interest rates of rL and rd respectively, the output of FISIM is calculated according to the formula (rL - rr) VL + (rr - rd) Vd.

• Only Loan disbursement is available by economic activity for the purpose of FISIM allocation..

• Question: is it in order to allocate FISIM based on loan disbursement ?

Data on valuation of output for own final use

Data on valuation of output for own final use by households and corporations is conspicuously absent in the National Statistical System (NSS). The coverage of the household surveys does not include capital goods (that small tools such as knifes, sauce pans, wheel barrows, canoes etc)

Costs for valuation of the output of goods and services produced for own final use by households and corporations should partly be based on the return to capital.

The Data on output of goods and services produced for own final use by households and corporations should be captured through surveys and census.

1993 SNA treated output of research and development as intermediate output, the 2008 SNA now treats it as capital formation.

Data is required on output of the R&D so that it is capitalized as “intellectual property products”

• Exception is when the activity does not entail any economic benefit to its producer (assumed to be the owner) in which case it is treated as intermediate consumption.

R&D valuation requires capturing all the output data from economically beneficial research and development.

Question – • How do we obtain this data especially when it is a subsidiary

function?

• How is the valuation done by the source?

Data gaps towards inclusion of - R&D in the asset boundary

Other data issues in asset boundary expansion

The SNA 2008 extends the assets boundary and government GCF to include expenditure on weapon systems

• We did not implement the 1993 SNA treatment as gross fixed capital formation of all expenditures by the military on fixed assets of a kind that could be used for civilian purposes of production.

• The Bureau will require data on purchase of military weapon systems that are seen to be used continuously in the production of defence services, even if their peacetime use is simply to provide deterrence.

Other data issues in asset boundary expansion

• The data should be disaggregated into military weapon systems for continuous use and for single use because, Single-use items, such as ammunition, missiles, rockets, bombs, etc., delivered by weapons or weapons systems are treated as military inventories

• military weapons, and vehicles and equipment whose sole purpose was to launch or deliver such weapons, were not treated as gross fixed

capital formation but as intermediate consumption.

• The data readily available is not be disaggregated enough to serve the

requirements above.   

Assets classification to consider

Within buildings and structures, a category has been added for land improvements. This replaces the 1993 SNA term "major improvements to non-produced non-financial assets". The costs of ownership transfer on all land are to be included with land improvements.The information, computer and telecommunications (ICT) equipment has been included as a new category under machinery and equipment,Weapon systems are recognized as produced assts and classified separately,The term "intangible fixed assets" has been renamed as "intellectual property products". The word "products" is included to make clear that it does not include third party rights which are non-produced assets in the SNA,R&D products are included within intellectual property products. The item "mineral exploration" has been renamed to "mineral exploration and evaluation" to emphasise that the coverage conforms to the international accounting standards, Computer software has been modified to include databasesThe term "other intellectual property products" replaces "other intangible fixed assets“

Rebasing challenges and proposed future improvements

Some SUT development and rebasing challenges

the UNHS has no provision for capturing data on the production of own account capital goods that would feed into capital formation.

Classified nature of military expenditure made it had to access the data,

the process of isolating the consumed military equipment from the component of capital accumulation requires detailed data

Informal nature of a big chunk of the economy complicates the process of developing institutional accounts.

Separation of the activities of the head office as recommended in the SNA 2008 could not be done because the data was not separated from the establishment data

Some recommendations for future Improvements

Establishment of continuous Trade in Services Surveys

Development of the data sources from within the bureau and other MDA.

Increase the staff levels to meet the work load currently only 5 permanent staff

Increase strategic training of the staff so that they can be able to handle the associated tasks.

Compute government consumption of fixed capital

Some recommended future Improvements

Increased use of the income and VAT tax data for the large and formal enterprises data needs

Need to establish and strengthen annual agricultural surveys, forestry surveys (planted forests inclusive) and fishing (including aquaculture)

Conduct censuses or surveys of fruit trees currently not captured in the production side and GFCF as recommended in the SNA 2008

Steps should be taken to ensure the central bank data (including BOP, monetary statistics and other financial institutions statistics) and GFS adequately serve the needs of National Accounts

Thank You

For listening