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Home / NSA sought IMF assistance to address revisions in GDP
NSA sought IMF assistance to address revisions in GDP
2018-06-07Staff Report 2 Staff Reporter WINDHOEK - The Namibia Statistics Agency (NSA) says that it is aware of huge revisions between the quarterly Gross Domestic Product (GDP) and the annual GDP, which is why it sought technical assistance from the International Monetary Fund (IMF). The NSA’s comment came in the wake of a Namibia Press Agency (NAMPA) article on the improvement of the compilation of quarterly GDP estimates as per the IMF Report. A recent NAMPA article detailed how the NSA engaged the IMF to seek technical assistance on independent assessments and to advise on improving and migrating the quarterly GDP constant prices to current prices and to minimise revisions in the estimates. According to NSA Statistician General and CEO, Alex Shimuafeni, the NSA is by no means disputing the article but released a statement to clarify the issue. The NAMPA article noted that the NSA should improve its quarterly GDP estimates as recommended by the IMF. The IMF recommendations are contained in a technical assistance report released May 30 2018 and aimed at supporting the NSA in improving national accounts statistics for policy making. “NSA is currently subscribing to e-GDDS (Enhanced General Data Dissemination System) as a stepping stone to subscribing to SDDS (Special Data Dissemination Standard), requires that NSA compiles quarterly GDP at current prices as one of the requirements. QGDP is a high frequency data report and will need tax data (administrative data) which is readily available and requires less resources and reduces response burden and assist to compile current price estimates,” said Shimuafeni. The IMF report also highlighted the importance of tax data for national accounts compilation, rebasing of the GDP and for quarterly national accounts. One of the issues identified was that more than 10 percent of the units listed under quarterly GDP estimates were classified as ‘unknown or other’. “Rebasing is an exercise undertaken every five years, which requires re-referencing of the base year to a new base year. Similarly, this serves as an opportunity to incorporate new methodologies and data sources (including the NHIES and LFS survey results). Currently, national accounts are in that process and adopting the SNA 2008 recommendations, which is the latest methodology for compiling national accounts. It is important to note that the NSA is currently not using tax data in the compilation of quarterly GDP as it is mentioned in the article. The issue of 10 percent is not relating to the QGDP but rather to the annual GDP and it is the Ministry of Finance (as the data source/owner) that needs to classify these data. To clarify, due to tax laws of anonymisation, some companies may not have been classified under any industry, and as such are unknown. However, this matter has been resolved with our engagement with the Tax Authority given the MoU between the two institutions. The IMF report with regard to this matter was overtaken by events as the current understanding between the NSA and the Tax Authority is now amicably resolved,” Shimuafeni explained. The article further elaborated that the NSA currently produces its quarterly estimates in constant prices using a variety of indicators, some of which are sub-optimal. As an example, NAMPA pointed out that the hotel industry activity is estimated using bed occupancy rates but stated that this indicator omits significant aspects of the industry’s output such as bars, restaurants, spas and gyms. Said Shimuafeni: “It is important to firstly re-iterate that the matters raised in the IMF report are not necessarily IMF opinion but are part of NSA assessment that was communicated to the IMF. The QGDP being a high frequency data deals with indicators that are readily available from the industry, and therefore for Hotels & Restaurants sectors, although in the annual GDP we cover all economic activities (i.e gyms, spa, restaurants etc), the only available indicator on the quarterly basis is the bed occupancy rate. This is merely an indicator and it remains so. To make it clear, with the understanding of the limitation of this indicator and to improve the estimate, NSA intend to use tax data in future to fill the gap of what is currently missing on a quarterly basis”. In addition, the IMF said the NSA also classified small or apparently dormant businesses to wholesale and retail, which may not be accurate. “It was agreed between the agencies that, as a matter of urgency, the NSA and Ministry of Finance would work together to correctly classify these unknown businesses,” the report said. “As stated, when estimating the activities of the Wholesale Retail and Trade sector, knowing that small and medium enterprises are engaged in several economic activities, with that understanding, the “unknown or other companies (the unclassified companies by the Ministry of Finance)” are classified as part of Wholesale Retail Trade (as they cannot just simply be ignored or discarded. Furthermore, given the MoU, the Tax Authority has agreed in future to classify according to the industry classification International Standard Industrial Classification (ISIC) as followed by the NSA,” said Shimuafeni. Also, responding to the IMF’s suggestion that in order to make headway in producing reliable national accounts statistics, the NSA should overcome the barriers that currently prevent the sharing of non-anonymised information between the Ministry of Finance and the agency, Shimuafeni noted that institutions are also guided by their respective laws. “The tax law states that information must remain confidential, which is the same with the statistical law. This is the reason, anonymisation of data is paramount to both institutions yet, we must ensure that companies are correctly classified in their respective industry,” he said. 2018-06-07Staff Report 2
