PRACTICAL ISSUES IN ECONOMIC STATISTICS Presented to The

PRACTICAL ISSUES IN ECONOMIC STATISTICS Presented to The Seminar Towards Implementation For International Standards On Economic Statistics Held At Mauritius By James Gatungu Kenya National Bureau of Statistics 6 th-9 th. July 2010

INTRODUCTION Kenya is country in the East African region with a: Total area of 582. 6 thousand sq kilometers and population of about 40 Million GDP at US$ 29, 917 Million GDP per Capita 748 US Dollars person (2009) Annual inflation rate 9. 2 % in 2009 Exchange rate of KSh 76 per US Dollar in 2009 2

INTRODUCTION CONT’D Real GDP grew by 2. 6 % in 2009. As shown, the economy is on the recovery path 3

INTRODUCTION - CONT’D Key sectors and their Contribution in 2009: Industry Per Cent Agriculture and Forestry Wholesale &Retail Trade Transport & Communication Manufacturing Education Financial Intermediation 24. 4 10 9. 8 9. 5 6. 0 5. 7 Real estate, renting & business services 5. 1 4

STATISTICAL INFORMATION AS A RESOURCE OF THE 21 ST CENTURY Ø Statistical information has become an indispensable factor of production and the resource of the 21 st century. It is part of the knowledge assets that have become the key driver of national wealth, drivers of innovation and learning, as well as that of the country’s GDP. 5

DATA COLLECTION AND PROCESSING The diagram below shows a summary of how data is collected from across the country for use in the compilation of official statistics Line ministries, Parastatals, Statutory boards etc Surveys & Censuses Administrative records Kenya National Bureau of Statistics Dissemination Done through website, publications; economic survey, statistical Abstract 6 Establishments and Households

SYSTEMS OF DATA COLLECTION OF ECONOMIC STATISTICS Coverage( e. g Real, fiscal) Instruments of Data Collection-Mail administered, Censuses & Surveys Periodicity of Data Collection- Monthly , quarterly, annual Level of detail and data items – Use of ISIC to classify economic activities, data items include- turnover, employment, compensation of employees, work in progress, inventories, production outputs and capital formation Administrative data from Ministries, Government Departments and Agencies 7

ACTIVITIES UNDERTAKEN/PLANNED Harmonization of instruments workshop aimed at: Reviewing needs and uses of all variables targeted to be collected and their relevance Reviewing the management and budgeting process Methodology Advising on questionnaire design and testing and issues of data collection Reviewing the sampling techniques and also creation and maintenance of business register, while also reviewing the creation and maintenance of area frames Addressing the data quality frameworks 8

ACTIVITIES UNDERTAKEN/PLANNED CONT’D Adoption of international classifications i. e. ISIC Rev 4 - Custom office piloting their system by using ISIC Rev 4 and domestication in the surveys (CIP, Census of Establishment) Business register- Undertaken from November 2009 to February 2010 - Currently cleaning the data-Basis for sampling of economic statistics. Updating Consumer Price Index (CPI) - Use of Geometric mean effectively February 2010 - Based on 2005/6 KIHBS data 12 Broad groups’ COICOP classification as per ILO 2004 CPI Manual recommendation. Compilation of a Harmonized Consumer Price 9 Index(HCPI) for COMESA.

ACTIVITIES UNDERTAKEN/PLANNED CONT’D Producer Price Index quarterly roll out Revision of Construction Input Index Analysis of modules incorporated in the last Population and Housing Census Preparing for revision of GDP base year and adoption of SNA 2008 10

ACTIVITIES UNDERTAKEN/PLANNED CONT’D Census of Industrial Production- Aimed at improving industrial Statistics- Coverage Mining & Quarrying, Manufacturing, utilities and Construction activities. Piloting of instruments done - June 2010, main activity -July 2010 - Followed IRIS 2008 recommendations Household Surveys-Rent, KIHBS (CPI, National Accounts, Agric. Production, Housing, Labour, Energy etc) MSE Survey- with a strong focus on the Informal Sector Manpower- Stock of skill inventory - at the piloting phase in collaboration with Ministry of Labour Agriculture Census preparation proposed in 2011 11 Integrated Labour Force survey

DISSEMINATION Dissemination done monthly, annually and quarterly through: Printed reports like Statistical Bulletins (LEI), quarterly GDP series, Annual Economic Survey Reports, Statistical Abstracts (Yearly) KNBS website KNBS Library- customers can buy most of the publications Data requests handled through phone call, fax and emails Keninfo/IMIS statistics databases-. Millennium Development Goals (MDG) Monitoring & Vision 2030 12

CHALLENGES/SOLUTIONS IN PRODUCTION OF ECONOMIC STATISTICS Inadequate funding in collecting baseline data Outdated frame- Revamping of Masterfile Low response levels – Publicity through Umbrella bodies, launching of economic reports & Sharing publications with data providers Respondent fatigue- Harmonization of instruments, frequency of data collection and use of e-questionnaire Mushrooming of new establishments/ Closure/mergers/ outsourcing Data quality and completeness- capacity building across NSS and Establishment of sectoral committee Capacity in subject technical areas 13

PRACTICAL ISSUES IN ESTABLISHMENT OF BUSINESS REGISTER 14

DEFINITION This is a register of all establishments in the modern sector v Details include: Ø Name of establishment; Ø Postal address; Ø Geographic location; Ø National Social Security Fund (NSSF)No. ; Ø Status of ownership; Ø Economic activity; Ø Response status (1=responded, 0=non-response and 4=estimated); Ø Total persons engaged; Ø Total persons employed; Ø Average earnings. v 15

USES OF THE CBR v Used as a frame for conducting establishment based surveys at the Bureau e. g. Ø MSIP (sample); Ø Bussiness Expectation Enquiry (BEE) (sample); Ø Labour Enumeration (census); Ø Hotels (sample) Ø Adhoc Economic Surveys 16

HISTORICAL BACKGROUND The Central Business Register (CBR) of establishments in the modern sector has existed in Kenya from the 1940 s v The Statistics unit was then a division in the Economic planning department of then Ministry of Finance and Economic Planning v The first register used to be updated by use of index cards v A program, written in French, existed for maintaining the register v 17

HISTORICAL BACKGROUND CONTD v The Register was later to be hosted and maintained at the Government Computer Services (GCS) mainframe v This meant sharing of computer time between the Bureau and other Government departments (All Government and Teachers Service Commission salaries were processed by the GCS) v Updates to the register were coded on sheets which would then be captured by the data entry clerks at the GCS 18

MAINTENANCE OF THE CBR New establishments: v Newly registered establishments were entered into the CBR from: ü The Registrar of Companies, Records from umbrella bodies such as Association of Manufacturers, Kenya Dairy Board, Federation of Kenya Employer, Kenya Medical Association, Pharmaceutical Board, etc. ü Records from the NSSF, KRA, CBK, Commisssion of Insurance and other parastatals ü Newspaper cuttings ü Returns from the Annual Employment and Earnings (LE) survey – for those establishments not in the CBR

MAINTENANCE OF THE CBRCONT’D New establishments: v A Waiting List (WL) was then created from the lists from Registrar of Companies, Umbrella Org. and Parastatals v Short questionnaires sent by end of March every yr to firms/establishments to get more details including: v Main economic activity v Date of registration v National Social Security Fund number (used to match with existing establishments) v Branches (if any) v Employment levels v Details of geographic location

MAINTENANCE OF THE CBR- CONT’D Updates include: Ø Amendments of establishment particulars; Ø Entry of new branches; Ø Deletions (closed establishments) v Sources of updates include: Ø Returns of the LE survey Ø Newspaper cuttings Ø Closed businesses from Registrar of Companies records

CHALLENGES v Over the years, the CBR faced challenges namely: Ø Inability to match the entry and exit of businesses due to the dynamism of the economy Ø Reduced staff due to the freeze on employment into the public Ø Inadequate capacity Ø Records from National Social Security Fund and Registrar of Companies included closed est. , never started businesses and deceased employers etc Ø Limited finances for conducting waiting list survey Ø Tedious process of updating thro GCS – validation of errors from data capture 22

CHALLENGES CONTD. Ø Low response rates to the mail questionnaires Ø Reliance on the program written in French (language barrier) Ø Erroneous estimation procedure (by economic activities) Ø Sharing of computer time at the GCS Ø Lack of frame for Micro and small enterprises 23

SYSTEM UPDATES v In the early 1990’s, there were efforts to transfer the CBR to personal computers v This finally succeeded and a new system established in 1996 v This however, inherited gaps from the previous system v Efforts were then made to conduct a census of establishments in order to have a new frame for sampling

CURRENT STATUS v Consultants brought on board (2007) to design a new system for the CBR ( including sampling procedures) v Census of establishments conducted in December 2009 – February 2010 v In process of identifying a consultant to finalize the CBR system to test the system and grossing of sampling variables

VISION An updated and functional register, Implemented and functional application system with inbuilt statistical estimation procedures which is able to generate tables/reports, Trained user and operational staff and training manual New system will allow for sampling as opposed to a census

THE END THANK YOU FOR ATTENTION.