The three authors are experts employed by the Balance of Payments Division, IMF Statistics Department, to provide relevant technical assistance to the countries of focus in this paper. The paper benefitted from the review and comments of Armida San Jose, Ralph Kozlow, Florina Tanase, Silvia Matei, Emma Angulo, Cornelia Hammer, Alicia Hierro, and Thomas Morrison.
In practice, use was made of the Balance of Payments Compilation Guide, 1995, which was produced in support of the fifth edition of the Balance of Payments Manual (BPM5), and draft chapters (released in 2012) of the BPM6CG, which was produced in support of BPM6. All subsequent references in this note are to the draft BPM6CG (www.imf.org/external/pubs/ft/bop/2007/bop6comp.htm).
In the project design, the GDDS data dimensions as they were at the time the project was established were followed. Thus far, only some of the participating countries have started to make progress with quarterly enterprise surveys, which may not be achieved within the project timeframe.
Many of these surveys were funded by DFID and conducted by Development Finance International (DFI). The last of the DFI surveys was in The Gambia and was completed in 2009 prior to The Gambia’s participation in the EDDI project.
At the start of the EDDI project, the following countries in Africa were undertaking enterprise surveys to collect data on cross-border financial flows and stocks: Botswana, The Gambia, Lesotho, Malawi, Namibia, Uganda, Swaziland, Rwanda, Tanzania, and Zambia. In the course of the EDDI project, Ghana, Kenya, Mauritius, Mozambique, and Nigeria have all commenced such surveys.
In this paper, such surveys are called Private Capital Flows Surveys (PCFS) although they may appear under various names in the countries themselves and in the country specific sections of this paper.
The project for Kenya was slightly different in that external funding for an enterprise survey was to be provided under a World Bank Statistics Capacity Building Program (STATCAP) to the BOP compiling agency, the Kenya National Bureau of Statistics (KNBS). The success of the EDDI project was therefore dependent on the KNBS allocating sufficient resources to BOP compilation and having the capacity to conduct future surveys without resort to external funding.
For Nigeria, the 2010 PCFS used the CDIS questionnaire for inward direct investment, which was changed to a questionnaire covering all cross-border financial flows and stocks for the 2011 PCFS.
Foreign Affiliates Trade Statistics and the closely related statistics on the Activities of Multinational Enterprises are treated in BPM6 as satellite accounts.
For Nigeria, by arrangement between the Central Bank of Nigeria and the Bank of Ghana (BOG), a team selected from this working group visited the BOG in June 2013 to learn from Ghana’s experience in establishing a database in support of its PCFS using appropriate data management software.
In this report, these reporting systems are referred to as ITRS.
There are two types of GBCs: GBC1s and GBC2s. The former are considered tax residents of Mauritius while GBC2s are not considered tax residents of Mauritius. For BOP and IIP purposes, both GBC1s and GBC2s should be considered residents of Mauritius.
In conjunction with this, the IMF’s Coordinated Portfolio Investment Survey Guide and the Coordinated Direct Investment Survey Guide were also consulted.
BPM6CG Chapter 2, Box 2.2, pages 26–28.
Foreign borrowing by public corporations that carry a government guarantee is assumed to be covered by existing data for public sector external debt. A case can be made for including some public corporations in the frame of an enterprise survey. These are likely to comprise public corporations that have some foreign equity and public corporations that are known to borrow abroad without a government guarantee, or which have substantial trade credit obligations and claims.
The Mauritius experience is instructive, as although its ITRS database is transactional, by recognizing that the bulk of cross-border financing by direct investment enterprises is lumpy, a list of enterprises accounting for the bulk of such transactions can readily be assembled and is not large in any given year.
The questionnaire for the BoM’s FALS can be found on the BoM website (www.bom.mu/default.asp?id=71538).
Practice varies as to whether enumerators are expected to complete an initial review of completed questionnaires, which would depend on the kind of training and who are employed as enumerators. As surveys are repeated and lessons learned, enumerators are likely to become more involved in the review process.
The simplest approach for an enterprise survey being conducted for the first time is to request enterprises to report on the basis of their financial year. On the assumption that the mix of accounting years stays constant, aggregating the resulting data can be acceptable. Over time, consideration should be given to requesting enterprises to report on a calendar year basis (if that is the compilers’ preference). Likewise, an enterprise survey being conducted for the first time is likely to follow the accounting practices of the enterprise. Subsequent surveys can be amended to request additional information that accord more closely to BPM6 standards (such as for the measurement of income after tax, which should exclude realized and unrealized valuation gains). The approach suggested here for the initial enterprise surveys is easier to implement and facilitates the use of enterprise financial statements in the data review process.
As a rule of thumb, and based on experience in the EDDI project, an adequate survey response would be one in which nearly all major enterprises in the survey frame and at least 70 percent of all other enterprises in the survey frame have reported.
Hansen H.M. and Hurwitz H.W. 1946, The Problem of Non-Response in Sample Surveys, Journal of the American Statistical Association, Vol. 41.
When a security is purchased by a nonresident, it is generally the case that a resident custodian bank will be responsible for the bookkeeping arrangements with the local stock exchange or capital markets authority in the country where the security is issued, and also for the bookkeeping arrangement that result from any subsequent transactions. For the most part, it is likely that custodian banks are only involved in transactions in securities listed on the local stock exchange (listed securities) but could also provide a custody service for unlisted securities purchased by nonresidents.
This is a fairly recent development. The general experience of the EDDI project is that resident enterprises are unlikely to have access to securities markets abroad. For issues of international bonds, this is readily verified by reference to data published by the BIS. Where there is information on securities issued abroad by resident enterprises, it is generally assumed that the purchasers are nonresident. For this reason, information provided by local brokers of residents’ purchases of securities issued abroad by resident enterprises is useful.