Outline of the Guidebook on Using Administrative Data for National Accounts

1. Outline of the Guidebook on Using Administrative Data for National Accounts EN/AGNA/2014/Pres/04 Ramesh Kolli UNECA Resource Person

2. Outline of the PresentationChapters proposed • Introduction • Data sources for compiling national accounts • Use of government accounts for national accounts • Use of annual financial statements of financial companies for national accounts • Use of annual financial statements of non-financial companies for national accounts • Use of Income Tax statistics in national accounts • Use of Value Added Tax statistics in national accounts • Use of external trade statistics for national accounts • Other administrative statistics in national accounts Annex: A brief overview of national accounts

3. 1. Introduction • The national accounts broadly uses the following sources of data: • Administrative statistics • Data associated with an administrative regulation • By product of administrative functions of government/regulatory agencies • Surveys and studies • Conducted by national statistical office, line ministries/departments, provincial governments, industry associations, non-governmental organisations, research institutions, etc. • Indirect methods • Labour input methods • Benchmark indicator methods • Expert judgements • The proposed handbook will focus on use of major administrative statistics in NA compilation

4. 1. Introduction (2) • Currently, there is no practical handbook that covers exhaustively, the use of all major administrative statistics in national accounts. • The UN handbook Links between business accounting and national accounting, Studies in Methods, 2000, deals with non-financial sector • The Eurostat handbook Essential SNA: Building the basics, 2013 though covers the major administrative statistics in Chapter 5, provides guidance mainly on compiling value added estimates. • The 1993/2008 SNA does not separately discuss the elements of business accounts and their translation to national accounts, though it touches upon how different SNA items are recorded in business accounts. • The draft version of Handbook of National Accounting: Financial Production, Flows and Stocks in the System of National Accounts, 2013 provides guidance to a limited extent on translating business accounts to national accounts, but is mainly for the financial sector.

5. 1. Introduction (3) • Objectives of the handbook • To provide guidance to the national accountants in Africa in transforming the information contained in the administrative data to national accounts concepts • Scope of the handbook • Administrative statistics cover a vast range of areas • This handbook aims to cover the accounts of government, financial and non-corporations, tax data and customs data • Incorporate in brief the relevant international standards/recommendations • Incorporate the experiences and good practices of countries in Africa

6. Data sources for compiling national accounts • This chapter will touch upon the sources of data that are normally used in the compilation of national accounts • Censuses • Population, economic, agriculture, livestock, etc. • Surveys and other data sets • Labour force, household budget, investment, agricultural, enterprise/establishment (mining, industry and services), construction, informal/household sector, surveys on external sector transactions, indexes of prices and production and unit value indices, etc.

7. Data sources for compiling national accounts (2) • Administrative statistics • Government accounts, business accounts (financial and non-financial companies), databases of central bank, Income tax data, VAT data, customs statistics, other administrative statistics such as the building permits, hotel occupancy, electricity sales, sales of manufactured goods (computers, consumer durables, etc.) indicators on postal and telecommunication, net tonne kms and passenger kms (road and air), cargo handled in ports, records of industry associations and research organisations, etc. • Other ad hoc sources • Benchmark studies done by statistical offices, researchers, Labour input methods, Benchmark indicator methods, Expert judgements

8. Government accounts to national accounts • Definition of government • Concept of general government in national accounts • Coverage of general government • Central government • Provincial governments • Local bodies • Autonomous government institutions • Distinction between administrative departments and departmental enterprises • Sources of government accounts • government budgets • Government Finance Statistics

9. Government accounts to national accounts (2) • Structure of government accounts, standardised general ledger codes for government revenues and expenditures • IPSAS are issued by IPSASB (International Public Sector Accounting Standards Board), an independent organ of IFAC (International Federation of Accountants) • Concordance between general ledger codes and national accounts codes (classifications of transactions) – Revenue and expenditure budgets • Economic classification (taxes, receipts from sales, current and capital transfers, property incomes, compensation of employees, purchase of goods and services, capital formation, etc. to facilitate compilation of sequence of accounts) • Purpose classification (COFOG) • Industry classification (ISIC)

10. Government accounts to national accounts (3) • Estimation of output (including CFC), consumption expenditure, and sequence of accounts from government accounts • African country practices • (References: 1993/2008 SNA, Eurostat: Essentials of national accounts building, GFS manual and UN handbook on public sector accounting) • Model budget-NA

11. Financial statements of financial companies for national accounts • Definition of financial companies • Concept and coverage of financial sector in national accounts • Banks – central banks and commercial banks • Insurance companies – life and non-life (including reinsurers) • auxiliary to financial service and insurance activities • Securities • Pension funding • Sources of annual financial statements of financial companies • consolidated by the regulatory agencies or central bank • individual companies • Structure of financial statements of financial companies • International accounting standards • Income and expenditure statement / profit and loss account • Balance sheet • Cash flow statement • Explanatory notes

12. Financial statements of financial companies for national accounts (2) • Concordance between the financial statements and national accounts codes (classifications of transactions or intermediate accounts) • Estimation of aggregates and sequence of accounts from financial statements of financial companies • FISIM estimation and allocation • Estimation of output and value added • Sequence of accounts • African country practices • References to prepare the chapter: • UN-ECB (2013): Handbook of National Accounting (Draft): “Financial Production, Flows and Stocks in the System of National Accounts” • Eurostat (2013): Essentials of national accounts building • UN (2000): Links between Business accounting and National accounting • 1993/2008 SNA

13. Financial statements of non-financial companies for national accounts • Definition of Non-financial companies • Concept and coverage of Non-financial sector in national accounts • Incorporated enterprises - public and private limited companies • Cooperative societies • Sources of annual financial statements of non-financial companies • Consolidated by the regulatory agencies or stock exchanges or a central Ministry (such as Commerce, Trade, Industry, Economic Development) • Individual companies • Accounts attached to tax returns • Structure of financial statements of non-financial companies • International accounting standards • Income and expenditure statement / profit and loss account • Balance sheet • Cash flow statement • Explanatory notes

14. Financial statements of non-financial companies for national accounts (2) • Concordance between the financial statements and national accounts codes (classifications of transactions or intermediate accounts) • Estimation of aggregates and sequence of accounts from financial statements of financial companies • Estimation of output and value added • Sequence of accounts • African country practices • References to prepare the chapter: • UN (2000): Links between Business accounting and National accounting • Eurostat (2013): Essentials of national accounts building • 1993/2008 SNA • Model business accounts-NA

15. Use of Income Tax statistics in national accounts • Concept and coverage of income tax data • Sources of data • Structure of tax data • Classification of income tax payers • Availability of data – Income, expenses, profits, tax collected • Estimation of select NA aggregates using tax data • African country practices • References to prepare the chapter: • 1993/2008 SNA • OECD NOE handbook – Chapter 4 • This chapter will be based on African country practices

16. Use of Value Added Tax statistics in national accounts • Concept and coverage of tax data • Sources of data • Structure of tax data • Classification of VAT by product • Availability of data – output, value added, tax collected by products • Estimation of select NA aggregates using tax data • African country practices • References to prepare the chapter: • 1993/2008 SNA • OECD NOE handbook – Chapter 4 • This chapter will be based mostly on African country practices

17. Use of external trade statistics and balance of payments statistics for national accounts • Concept and coverage of external trade statistics and BoP statistics • Sources of data • Classification of trade statistics, valuation and coverage, data by products • Concordance between the trade and national accounts and BoP entries and national accounts • Estimation of aggregates and sequence of accounts • African country practices • (References to prepare the chapter: • 1993/2008 SNA • Eurostat: Essentials of national accounts building • International Merchandise Trade Statistics: Concepts and Definitions, United Nations • IMF: BPM 6

18. Other administrative statistics in national accounts • Production of minerals and manufactured goods • Sales of electricity • Building permits • Construction completion certificates • Data on retail sales • Hotel occupancy • Tonne kms., passenger kms., (road, water and air) cargo handled in ports • Indicators on postal and telecommunication • Records of central bank/regulatory agencies on banks and insurance • This chapter will be based on African country practices

19. Annex: Brief overview of national accounts • Structure of SNA • Categories, classifications and accounting rules • Economic agents (subjects): • Flows and stocks • Purposes • Accounting rules • The central framework (the accounts) • Volume measures and measures in real terms: population & employment tables • Flexibility • Important Macro-economic Aggregates • 2008 SNA changes affecting GDP estimates • Milestones and Minimum Requirement of Datasets for implementing 2008 SNA

20. Summary and Conclusions • The structure of administrative data (including the government budgets and business accounts) is mostly country specific; • Concepts and definitions followed in administrative statistics may not exactly correspond to the national accounts concepts; • Therefore, the proposed handbook would draw upon best African country experiences in translating administrative data to national accounts; • For the government, financial and non-financial corporations, the handbook will attempt to present broad correspondences between the entries in the accounts and national accounts aggregates.

21. Thank you Your comments and suggestions