Botswana: Report on the Observance of Standards and Codes—Data Module Response by the Authorities

This Report on the Observance of Standards and Codes data module provides a review of Botswana’s data dissemination practices against the IMF’s General Data Dissemination System, complemented by an in-depth assessment of the quality of the national accounts, consumer price index, producer price index, government finance, monetary, and balance-of-payments statistics. All three of Botswana’s statistics producing agencies have a legal and institutional framework that supports statistical quality and demonstrate an awareness of quality as the cornerstone of statistical work. All three agencies also demonstrates professionalism and provide ethical guidelines to their staff.

Abstract

This Report on the Observance of Standards and Codes data module provides a review of Botswana’s data dissemination practices against the IMF’s General Data Dissemination System, complemented by an in-depth assessment of the quality of the national accounts, consumer price index, producer price index, government finance, monetary, and balance-of-payments statistics. All three of Botswana’s statistics producing agencies have a legal and institutional framework that supports statistical quality and demonstrate an awareness of quality as the cornerstone of statistical work. All three agencies also demonstrates professionalism and provide ethical guidelines to their staff.

Overview

The authorities (the Bank of Botswana—BoB and the Ministry of Finance and Development Planning—MFDP, including the Central Statistics Office—CSO) very much welcome the IMF’s ROSC report on Botswana. There remain some areas where there are differences of opinion regarding the assessment. Nevertheless there is broad agreement over the content of the report and, as such, it has made a timely and positive contribution to the development of statistical capability in Botswana. As well as making an independent assessment according to international standards, it provides a catalyst and a focus to bring together the continuing efforts by the various institutions to improve the quality of their statistical output and its effective dissemination. The main lessons from the report are the need for enhanced coordination between producers and the requirements for improved dissemination, especially regarding making proper use of recent developments in information technology, and the authorities intend to respond accordingly.

The authorities welcome in particular the positive approach of the report, including the observation that, through a well-directed program of action, statistics in Botswana could soon move beyond the GDDS towards the requirements of the SDDS. This will provide motivation to establish ambitious objectives for improvement, and is hoped that the Fund will respond positively to requests for the inputs of technical assistance that are likely to be necessary as part of this program.

Response to Recommendations

A. General Recommendations

Short-term

  • As a priority, prepare GDDS metadata on (a) current statistical production and dissemination practices and (b) plans for short- and long-term improvements covering the data dimension (coverage, periodicity, and timeliness), the quality, the integrity, and the access by the public, for all sectors.

The need for both these actions is appreciated. For (a), at the CSO operational manuals are available and all publications have a section on sources and methods. However, these will be improved over time. At the BoB the process of preparing more comprehensive metadata has been initiated following the ROSC mission and will be taken forward in the context of the regional GDDS program that began with the seminar in Gaborone in December 2001. For balance of payments and monetary statistics, the preparation of metadata is explicitly part of the BoB work program for 2002. At the MFDP the process of preparing the metadata following the IMF mission in December 2001 has been initiated.

For (b), at the CSO and the BoB, the modalities for preparing such plans are being considered in the context of the specific data categories. At the MFDP, considerations are being made for preparation of plans for improvements.

  • As a priority, strengthen data sharing and coordination among major agencies, especially with a view to reconciling major data sets with different accounting periods. In addition, data sharing and coordination would help to address key statistical issues including the basis for recording diamonds and emerging source-data needs (particularly monthly merchandise trade statistics) for the compilation of timely quarterly national accounts and quarterly balance of payments.

Data sharing and coordination already exist among major agencies like the CSO, the BoB and the MFDP to a considerable degree. There have been discussions within government to move towards synchronizing the reporting years and there was a general consensus to move towards using the July to June reporting year. However, discussions are under way to finalize the decision. The GFS data are available on a monthly basis and as a short-term measure, adjustments could be made on different reporting years.

At the practical level, the regularizing of production of quarterly GDP statistics and the start of production of quarterly balance of payments data will go a long way to resolving the problems with different accounting years. For wider issues, and to ensure more effective coordination between producers of statistics, the establishment of a producers committee comprising representatives of the three main statistics producing agencies is currently being considered.

  • Make available more data and metadata for all sectors premised on the need for rapid and wide access. For example, disseminate monetary data through media such as press releases and on the BoB’s Internet website, in addition to the monthly BFS.

All three agencies are aware of the need to take advantage of the opportunities for effective dissemination through the Internet. The BoB has initiated a two stage program to develop its website, with the first results in terms of daily and weekly updates of key data, being seen from mid-December 2001. (This will be done in-house. The second stage will be to employ consultants for a more comprehensive redevelopment of the website.) At the same time consideration is being given to issuing more regular press releases. Both MFDP and CSO are similarly engaged in programs to enhance the quality of their websites. The MFDP has an Internet website and Departments are encouraged to publish information on the website. Budget Administration has made available information, including GFS data, to be published on its website.

  • Develop and disseminate advance release calendars for all sectors.

The desirability of these is appreciated. The CSO already provides a lot of information through its annual calendars. The BoB intends in the near future to start publishing advance release dates for the monthly Botswana Financial Statistics (BFS) publication. However, it is equally appreciated that such calendars are of most value when the dates can be adhered to, so certain organizational changes will need to be introduced and consolidated before this can take place. Pre-announcement of the dates of GFS publications are to be made through the Internet starting 2002.

  • Enhance transparency of statistical policies and practices by, e.g., publicizing practices relating to internal access to data prior to release and providing advance notice of major changes in source data and compilation methods.

The point is noted and the modalities will be considered. For GFS data, the BoB and senior staff in MFDP and BoB do have internal access to data prior to publication. Major changes are usually explained in the form of notes accompanying the Tables. However, in future major changes would be documented and published on the website.

  • Identify a specific contact person in hard copy publications and on Internet websites.

It is the established practice of CSO that details of relevant contacts are provided with its publications. The BFS now includes contact details of two people who will help with enquiries. These will also be introduced on the BoB’s website.

The Permanent Secretary of the MFDP or the Secretary for Budget Administration are the contact person for all GFS publications.

Medium-term

  • Promote training in statistical methodologies, including through participation in the IMF Institute’s methodological courses, as well as the regular training of all personnel.

All three agencies place great emphasis on human resource development, and note the particular need for relevant staff to be properly trained in statistical methodologies. The extent that the ROSC exercise can help further this objective will be much appreciated. In November 2001, the Governor of the BoB met with the Director of the IMF Statistics Department to discuss the way forward. The matter was also discussed with the MFDP and the CSO at the time that the report was formally presented.

Staff members involved in the compilation of GFS data are trained on the GFS course offered by the IMF. Additional training offered by other institutions would however broaden the grasp and deepen the understanding of the compilers.

  • Regarding survey-based collection systems, disseminate information on data biases, response rates, sampling techniques, sampling, and nonsampling errors, and imputation methods for nonresponses.

This is potentially a major undertaking. For some categories - e.g. survey response rates -providing the information is relatively easy. But for others more work will be required. While careful consideration will be given to these suggestions it is not clear that all will be accorded equal priority.

  • Publish articles (or republish existing articles in convenient form) dealing with the methodology used in compiling macroeconomic statistics.

If achieved this will help go a long way to making progress on the previous item. The BoB staff already have a commitment to undertaking research and where relevant they will be encouraged to produce such articles.

B. National Accounts

Short-term

  • As a priority, building on the regional SADC approach, advance the work program for implementing 1993 SNA with an increased focus on conceptual adherence. Initially the implementation could be limited to the GDP estimates.

The implementation 1993 SNA is already under way; CSO has already adopted a number of concepts. Despite the Fund’s assessment of LNO in this area, CSO is of the opinion that a lot of work has been undertaken in the area of classification/sectorisation. The work program for implementation is being done with assistance from CESD Communautaire, a NGO in Luxembourg, and is expected to end December 2002. Under this program CESD is providing technical support in the use of ERETES software.

Medium-term

  • Develop proactive methods for encouraging voluntary response to survey-based statistical enquiries and mechanisms for data-user feedback.

  • Expand the work program for implementing 1993 SNA to include the development of financial accounts and balance sheets.

C. Consumer Price Index and Producer Price Index

Short-term

  • As a priority, redesign the PPI to bring it up to international standards as regards the sample size and validation procedures.

Review of the PPI is a concern of the CSO. The change of the PPI to a product base as opposed to the company base is necessary. This would improve its quality and will allow comparison with other similar indices. The issue of the sample size will depend on the success of the change.

  • Compile and disseminate the PPI on a monthly basis.

The PPI is compiled quarterly due to resource constraints. Hence the change to the monthly basis will be addressed in line with the available resources.

Medium-term

  • Implement a strategy for collecting price observations on house rentals reflective of existing market conditions and integrate same into the CPI.

It is the intention of the CSO to strengthen the quality of the CPI. Weights are revised after Household Income Expenditure Survey (HIES); the next HIES is planned for April 2002 to March 2003. This will provide the necessary information to revise the basket. The basket will be reflective of the existing market conditions and it will integrate the same into the CPI. This will be in line with recommendations for the compilation of an index that will allow for the harmonization of SADC price statistics.

  • Extend the PPI to include the mining and quarrying industry.

The comment is noted.

Long-term

  • Following the next change of the CPI weights to 2002/03 (expected in 2004), regularly update the weights every five years, at least.

The schedule for the next weights revision is in place, and the desirability of more frequent revisions is noted. However, whether this can be achieved depends on the availability of resources as experience has demonstrated that there is are competing demands on the CSO’s capacity to undertake survey work.

D. Government Finance Statistics

Short-term

  • As a priority, disseminate monthly budgetary central government statistics within one month after the end of the reference period and central government debt data within one quarter after the end of the reference period.

Starting 2001/2002 financial year, monthly GFS data are made available to the users within one month after the reference period and debt data would be made available on a quarterly basis in the near future. With regard to year-end GFS data, these figures are currently released together with the Appropriation Bill in February of the following year and thus resulting in a 12 months delay. These final year-end figures would however, starting end of 2001/2002 financial year be released immediately after compilation, which is usually four months after the reference period.

  • Develop a migration plan for implementation of 2001 GFS Manual.

The implementation of the Government Accounting and Budgeting system will start by August 2002 and this system would allow for a systematic and gradual move towards a modified accrual accounting by April 2008. This would therefore facilitate the adoption of the 2001 GFS Manual.

Medium-term

  • Emphasize the automation in the compilation of GFS while introducing the computerization of the accounting and budget system.

The implementation of the Budgeting and Accounting system will automate the compilation of GFS and shorten the lag in production of the GFS data.

  • Shorten the current two- to three-year lag in dissemination of data on local governments.

The Local Authorities presently prepare their accounts manually. The Ministry of Local Government has started to introduce the computerization of accounts in Local Authorities, which should be completed by 2003 and this will reduce the said lag.

  • Compile consolidated annual GFS on the general government sector (consolidated central and local governments) and provide time series harmonized initially with 1986 GFS Manual methodology and later with 2001 GFS Manual methodology.

The GFS standard is not at all known in the Local Authorities. Therefore, after the completion of the computerisation of Local Authorities accounts, there would be need for Ministry of Local Government to introduce preparation of accounts in accordance with the 1986 GFS Manual in Local Authorities. This exercise however will not be an easy one and Botswana will require Technical Assistance to facilitate compliance. Thereafter, Botswana will be able to consolidate annual GFS data on the general government sector.

  • Design and implement a phased work program to improve documentation on the concepts, definitions, classifications, basis of recording, and data sources used to compile GFS.

Plans are under way to document concepts, sources and methods used in compiling GFS.

E. Monetary Statistics

Short-term

  • As a priority, arrange for the electronic transmission of the BoB’s monthly balance sheet to the Monetary Statistics Section as soon as it is processed rather than awaiting audit.

This has been initiated. The Monetary Statistics Section received the relevant October 2001 balances before the end of November, and in line with the submissions from the commercial banks.

  • As a priority, instruct the commercial banks to classify their accounts into resident and nonresidents accounts according to the principle of “center of economic interest” rather than according to the nationality of the accounts holder, as is the case at present.

This was discussed with the commercial banks at a workshop on reporting held in October 2001. The banks’ representatives appreciated the importance of the classification but raised queries about its application in practice. Further assistance from the Fund may be required to advise on best international practice in this area.

  • Request the electronic submission to the BoB of the balance sheets and the accompanying schedules of the commercial banks and other deposit-taking institutions.

At the seminar referred to above, agreement with the banks was reached on a program to move to electronic submission of their returns. Following a period of parallel reporting, the full transition is scheduled to take place during 2002.

  • Routinely cross-check the monetary data with information produced by other sections or departments of the BoB and by other official agencies.

More assistance will be required to identify the possible sources which can be used for such cross checking.

Medium-term

  • Install and make operative software that would allow automatic consistency checks and flagging, seasonal adjustment of series, and the building of a comprehensive monetary database.

The BoB is in the process of introducing, with help from the IMF, an economic and financial database. Advice from the Fund on what additional software requirements will be necessary to fully implement this recommendation would be welcome.

F. Balance of Payments

Short-term

  • Improve the presentation of the financial account by showing separately (a) foreign direct investment in Botswana and abroad, and transactions in foreign and domestic securities; (b) changes in foreign assets and foreign liabilities of the monetary authorities, government, banks, and other sectors; and (c) arrears as part of exceptional financing in the analytic presentation.

(a) and (b)—it has been agreed that these changes will be introduced; (c)—further guidance from the Fund will be needed as to the implications of this change.

  • Strengthen selected classifications and methods: (a) Reclassify realized capital gains on reserves; (b) support the resident-nonresident classification of banking source data according to the principle of “center of economic interest”; (c) eliminate transactions between residents in the transportation account; and (d) update some estimation methods for freight payments on imports and travel.

(a)—This change will be made as part of the revisions to the estimates for 2000; (b)—at the recent seminar on reporting the commercial banks were urged to take seriously the need to observe correct classifications when reporting foreign exchange transactions; (c)—the adjustment will be made as part of the revisions to estimates for 2000; (d)—the method used to adjust for freight is both out of date and different form that use by the CSO. Updating this is included in the 2002 work program of the Balance of Payments Section, and will carried out in close collaboration with CSO.

Medium-term

  • As a priority, accelerate the development of quarterly balance of payments statistics. An essential feature of this effort would be to put in place timely compilation of monthly merchandise trade statistics.

The current intention is to start publishing quarterly balance of payments during the second half of 2002.