20220407-IMF-Botswana_Technical_Assistance_Report-Price_Statistics_21页_577kb

Summary of the Technical Assistance Report on Botswana: Price Statistics (April 2022)

Core Content

This report outlines the findings and recommendations from a technical assistance (TA) mission conducted by the International Monetary Fund's (IMF) AFRITAC South in November 2021, aimed at supporting the development of price statistics in Botswana. The mission focused on expanding the Producer Price Index (PPI) coverage, improving the Consumer Price Index (CPI), and addressing challenges in collecting price data from the agricultural sector.

Main Views and Key Information

1. Producer Price Index (PPI) Expansion

• Objective: Expand PPI coverage to include agriculture and manufacturing to improve the reliability of national accounts and economic policy-making.
• Current Status:
  • PPI for mining was reinstated in September 2021 after being suspended in late 2019 due to extreme volatility.
  • A preliminary sample of manufacturing establishments was selected using a cut-off sample method, where establishments contributing to 80% of total sales were included.
  • The preliminary sample included 36 establishments, covering 80.7% of total manufacturing sales. However, some priority industries (e.g., wearing apparel, plastics) were excluded due to their small contribution to sales despite a larger number of establishments.
• Recommendations:
  • Finalize the PPI sample by the end of 2021.
  • Initiate the price collection process for manufacturing by personal visits.
  • Use detailed product level weights for PPI compilation.
  • Discuss with national accounts to confirm the inclusion of priority industries.
  • Continue efforts to collect data from commercial farms, with a focus on horticulture and poultry.

2. Agriculture

• Challenges:
  • Collection of price data from commercial farms has been difficult, especially due to the Covid-19 pandemic, which disrupted data gathering and outreach.
  • Some agricultural products, like root vegetables, are seasonally unavailable, requiring the use of imputation methods.
• Data Sources:
  • The Botswana Agricultural Marketing Board (BAMB) provides monthly producer prices for cereal crops, but its website is currently inaccessible.
  • SB receives regular price data from two main egg farms, though details by egg size are limited.
• Recommendations:
  • Arrange a meeting with BAMB to secure the supply of price data.
  • Begin compiling a PPI for cereal crops if BAMB agrees.
  • Use overall mean or targeted imputation for seasonal missing data.
  • Conduct an intensive engagement period with poultry and horticulture farms to ensure data provision.
  • Work with the Department of Agriculture Business Promotion to identify major commercial farms.
  • Start compiling a preliminary egg price index and consider dissemination alongside mining and utilities indexes.

3. Consumer Price Index (CPI) Improvement

• Current Issue: The CPI currently excludes owner-occupied housing costs (OOH), which are important for consumer price measurement.
• Proposed Approach: Use the rental equivalence method to estimate OOH costs based on rental survey data.
• Data Utilization:
  • Data from the 2015/16 Botswana Multi-Topic Household Survey (BMTHS) is available for estimating housing stock and average rental prices.
  • These data can be used to compile expenditure-based weights for OOH.
• Recommendations:
  • Continue expanding the rental price survey to better represent the OOH sector.
  • Compile a preliminary OOH weight using BMTHS data and use it with rental price data to create an analytical CPI.
  • Disseminate the analytical CPI internally for impact assessment.
  • Plan to include OOH in the headline CPI as part of the next CPI update, which is expected to be in 2023/2024 after the next HBS.

Key Recommendations

• PPI Expansion:

  • Finalize the manufacturing PPI sample by the end of 2021.
  • Initiate price collection via personal visits.
  • Use detailed product weights where possible, and equal weights as a last resort.

• Agriculture:

  • Engage with BAMB and other data sources to secure price data.
  • Implement imputation methods for seasonal unavailability.
  • Conduct face-to-face engagement with farmers and seek support from farming associations.

• CPI Improvement:

  • Use rental equivalence approach for OOH.
  • Compile and test the analytical CPI with preliminary weights.
  • Prepare for the next CPI update using data from the upcoming HBS.

Conclusion

The TA mission emphasized the importance of expanding PPI coverage and improving CPI to better reflect economic conditions and support informed policy decisions. Despite challenges posed by the pandemic, progress is expected to resume as the situation stabilizes. The recommended action plan includes a detailed schedule and collaboration with various government departments and agencies to ensure the successful implementation of these initiatives.