Mariam Raouf and Josee Randriamamonjy - IFPRI
Social Accounting Matrix (SAM) is a comprehensive and coherent socio-economic database that combines many datasets ranging from sectoral survey data, economic census, trade data, national accounts, government budget, direct and indirect taxes as well as subsidies. As such, it is considered as a representation for the economy, that shows the circular flow of all transfers and real transactions between sectors and institutions. Having a more disaggregated SAM with regards to activities, households, subnational regions is very important for economic analysis as it provides a rich dataset that helps decision makers in developing, designing and evaluating economic and investment policies at the subnational level. As a backbone dataset for Computable General Equilibrium (CGE) modelling, SAM building represents the first step towards elaborating sophisticated tools that help decision makers in assessing the likely impacts of their policies on the macroeconomic outcomes and poverty reduction. SAM and CGE modelling are among the best tool for evidence-based policy analysis.
Figure 1: Nexus SAM Coverage
However, many countries do not have SAMs or they are not updated and a few countries have SAMs that are disaggregated at the sub-national level. Also, SAMs are often based on different classification and accounting systems, with less available disaggregation especially with regards to agriculture and downstream processing. Moreover, households are less frequently separated into urban/ rural or into different subnational regions. To improve the quality of SAMs, the Nexus Project, which is led by the International Food Policy Research Institute (IFPRI) in a collaboration with other international organizations[1] and national statistical agencies, has created a SAM building toolkit. This toolkit incorporates a standard format of working sheets for data using a single classification and accounting system to construct/update national SAMs, resulting in a consistent and transparent method for SAM construction across countries with a standardized economic structure. These working sheets are linked to their original data sources so that they can be easily traceable for data sources and assumptions (Breisinger et al., forthcoming). The Nexus Project intends to produce a set of common data standards, covering many African and Asian countries (Figure 1).
Since 2014, IFPRI has collaborated with the Central Agency for Public Mobilization and Statistics (CAPMAS) to construct a series of Social Accounting Matrices for Egypt, by conducting three training workshops with the National Accounts team at CAPMAS. Building on the Memorandum of Understanding CAPMAS and IFPRI have signed for jointly building Social Accounting Matrices for Egypt, the fourth training workshop took place during 9-10 January 2018, with funding from the International Fund for Agricultural Development (IFAD) and CGIAR-PIM under the Agriculture (Arab) Investment for Development Analyzer (AIDA) project[2]. The aim of this training was to present the Nexus SAM building toolkit to the National Accounts team and construct the first Egyptian Regional SAM for 2014/15, in the context of AIDA project. The Regional 2014/15 SAM for Egypt includes 68 sectors and 72 products (of Nexus 86). It also includes 13 factors of production, where Labor is further disaggregated across rural and urban areas and into four education-based categories, capital is also disaggregated into four subcategories: crops, livestock, mining, and other; and land. Households are splitted into 3 household groups (urban, rural farm, and rural nonfarm), and disaggregated by national per capita expenditure quintiles. Sectoral production, factor markets and household groups are splitted into 7 subnational regions: Greater Cairo, Delta, Alexandria, Northern Upper Egypt, Middle Upper Egypt, Southern Upper Egypt and Suez Canal[3] (Figure 2).
The Macro SAM was firstly built for a single aggregate activity, commodity, labor and household accounts using three main data sources: the official national accounts, the IMF Government Financial Statistics, and the IMF Balance of Payments Statistics. These sources are mapped to the macro SAM accounts following a standardized accounting framework. Disaggregating sectors and commodities is useful for evaluating backward and forward production and consumption linkages, hence the Supply-Use Table was updated by disaggregating both activity and commodity accounts. Sectoral production statistics were employed to disaggregate activities and commodities, relying on FAOSTAT for crops and livestock, AQUASTAT for aquaculture and fisheries, the 2013 CAPMAS Economic Survey for manufacturing, COMTRADE for export and import values, and TRAINS database for the import tariffs. The 2015 HIECS data provided by CAPMAS was used to disaggregate labor and household incomes and consumer demand. Finally, the Macro SAM and updated SUT were sent to GAMS for final cross-entropy balancing to derive the National SAM. To identify the welfare impacts of any policy reforms, Nexus SAM has emphasized on the income distribution dimension by disaggregating factors of production and household accounts using income and expenditure shares. More detailed information was used such as the factor intensity (by education level of workers) in each sector and the household expenditure patterns, in terms of consumption, savings and tax rates. The main data sources for this information was the 2015 HIECS that was provided by CAPMAS. Then, cross-entropy balancing code was again applied using GAMS, especially to reconcile inconsistencies that result from using different sources.
But where do the higher value-added industries exist? And how can we account for the different archeological conditions of Egypt (desert vs. Nile valleys, or coastal vs. inland …)? The National and household SAM was split into 7 subnational regions, by disaggregating activities, factors and households, while the commodities, government, savings and investment as well as the transactions with rest of the world remain on the national level. The splitting of factors and households was replicated using the same surveys data.
The training provided opportunities for sharing information and strengthening capacities. Participants were highly interactive in the discussion, and very interested in exploring and applying the new SAM construction toolkit to replace international data with local data sources. As a future next step, IFPRI and CAPMAS plan to organize a joint event to launch the first Regional SAM for Egypt possibly in mid-2018.
[1] - These include the Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD), the European Community’s Institute for Prospective Technological Studies (JRC-IPTS), the World Bank, and the United Nations University’s World Institute for Development Economics Research (UNU-WIDER).
[2] The (Arab) Agricultural Investment for Development Analyzer (AIDA) is a tool that is being developed as part of three-year project (2017-2020) with the same title funded by IFAD with co-financing from CGIAR-PIM and implemented by IFPRI and its partners with focus on Egypt, Jordan, Lebanon and Tunisia. AIDA builds on the previous IFAD-IFPRI-CGIAR PIM project “Decreasing Vulnerability to Conflict in Arab Countries through Rural Development’’
[3] - Ministry of Planning, Monitoring and Administrative Reform, 2015, Regional Accounts.
