Capital formation estimates of the federation of Rhodesia and Nyasaland

,

UNITED NATIONS ,

ECONOMIC AND

SOCIAL COUNCIL

ECONOMIC COMMISSION FOR AFRICA Working Group on Problems of Estimating Capital Formation Addis Ababa, _~-16 October 1963

--DOCUMENTS

OFFlC;-l

FILE cur,

"cO TO ~E TAKE"J OUT

CAPITAL FORlfillTION ESTIMATES OF THE FEDERATION OF RHODESIA AND NYASALAND

(by E. Osborn)

,

I

I

63-3334

".-1

0AS.4!CF/)IPI

Capital Formation Estimates of the Federation of Rhodesia and Nyasaland

1. Gross capital formation estimates are producod annually, classified,.

(i)

(ii) (iii)

by type of asset, by sector,

by industrial use.

(v)

(Vi) (Vii)

(Viii)

Current value estimates are published for the three constituent territories of the Federation, 'whereas current and constant 'value estimates are presented for the Federation. 'Although a ten-fold division of vehicles, plant, machinery .andequipment is given for

the Federation no division of this category is given for the territories.

No division of ~uilding and. works is attempted 'at either the territorial or Federal levels.

2. The scur-ce s of information for cUrrent value est ama-te s can be

enumerated as·follows:-·

(i)

government accounts, supplemented by ad hoc enquiries, (ii) questiOmlaire returns from pub.:Lic corporations,

(:i.ii) questionnaire returns from private corporations,

(iv) questionnaire returns from non-agricultural unincorporated enterprises and,non-profit making organizations, conducted on a sample basis and grossed up according to sampling fractions (tl:tese returns commenced for the calendar year

1962) ,

end-use tabulations of imports,

industrial census data of pr()duction of capital goods, extrapolated by sample returns,

industrial census data on capital formation,

census and quarterly returns from building and contracting enterprises on work done, analysed according to now and repair work and analysed according to work done for the

CAS/4?CF/,/P

/1.'

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...-,-j """,..

(xi) (xii) (ix)

(x)

annual non-African agricultural censuses in Southern Rh&esia

a.hd

Northern Rhodesia, (forint-ormation en land under cultivati.6h,irrigation and affcresta.tion, numbers of fruit trees and numbers cf tobacco barns, dams, tractors 'a.nd: vehicles),

the Southern Rhodesia Ministry of local government (for information on the number of improved type of dwellings in the African rural areas),

published accounts of publiC and private corporations, registration of motor Vehicles.

3.' The type of asset classification is:

( i) (ii) (iii) (iv) (v)

land improvement, mine development, building and 'works,

vehicles, plant, machinery and equipment, and changes in stocks (inventories).

4. Land improvement: territorial and Federal totals are obtained by combining recorded data from the analysis of'gcvernment accounts a.nd questionnaire returns with estimates for then6n-African agricultural sector forSoutherri Rhodesia and Northern Rhodesia. In:"'thecase of the latter average cost valueS are applied to the e':x:tensfClh 'of acreage under cultivation, irrigation and afforestation and to the increase in the numbers of' different type'S of fruit trees. The non~African agricultural sector

in

^{Nyasaland isde~lt} With by direct questionnaire return from ccmpan1Els; the non-African agricultural unincorporated enterprise sector in Nyasaland which is of minor importance is ignored.

5.

Constant price estimates are obtained by deflating the ~ecorded

figures by an index of the average African agricultural wage in each territory and by applying the base-year average co at values to the extensions of acreage, e,tc. in the case of the non-African agricultural sectors in Southern Rhodesia and Northern Rhodesia.

. ^.

• CA·S. 4/cF!wp

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6.

Mine development: the territorial and Federal figures are

'..', ····obtained from QU6st'f:c;'nrtair"e

retu~ri:s-,··a:nd..._,#s':t.~(:p.Ubil:sb.eid. ..

:a'csdtints ·01:

eompanies.Th,j;'cdrtst~nt; pH8e'\ist±rn!l:tes"are ob'tairiedby"·a:e:t'l.i'ti;o~i

"Iiitli: a c6mposi:te 'index Of'~;"VE"rage Afr:Lcan ';"nd -non":Africa-n'wag&s,';earried

• out at a tetiitoria'l

laver:'

.r.

\'," ,..;,". • .•~....! c' '-,_ " ' , ,

1,~ Building and Works: the estimates for the official's~cto~~, ^viz.

,,,central and local

~o~ernment,

^government

ent€lrpri.s~;~';d·;~b{id·c;;pora-

;;~'., ' " , ' - " . ." .. .C':!.'Y.:·;',::" .':',T.,-., t:-<~~!.:'<" .,: :,': ':-rf ~ , .,-;;!~J

ttons, are obtained from the analysis of governmen~accounts supplemented

~ ".~""~;_"',' c," ': ::'-;·';;;;:<.i,-- ~: ',:':'_',-r;::~,i·.,~:~:'-i ,,;",-~;;_~_;} ....: :i"..':f<~ -;'-"'.;

by ad hoc enCJ.uiries where necessary, CJ.uestionnaire returns from public

..'>'. '.'!"''- __:_;~_:<;::-' ,;"~~,..L, ; . : , - " ' - ' - : F " : L-::. ;'/.,.- '.-; -:!-., - '.,,- -, .:',: ~

.corporations and the published accounts of .public corporations. The

. _'-..;.J .. ;,- •(."'~',:: ::r_ ^{' r ' , c1 - ' ',' :}

b~ildings and works of the Federal Government are analysed territorially

,"- -' • . ;:" :: ;'. ... ,- ;-:.; ~ ' . ' "', ,~(" ' . r'-',J

ac';ording to infprmation obt.ained f:r:om the Ministry of Works, the .

.!..\;;:"'. """"-,,-,' ,-:.','- : : : ; ._-··.~:~:,'~,·.·.:.i.'_':~. . .__ '.:.;'.-':',:'.;":: ,';;'·'-"T .. _,' . , ; " " ,

Ministry of Posts and Telegraphs and t~e Ministry of Transport.

t " , .:'[4 .,':'-. " : - . . ;.::- -<,-' " ,."-" " " , " ;';/;' .>' ,

,8" The.,estimate.s Cl.f the totals for the p+:ivat~ secto,: are. obtained

. c, ..>.'.".

f~om .the censusard quarterly returns from building and .contracting

e~t~r~rises

and estimates of own

ac~ount

construction of the

a;~ipultural

""J) _'."j:.;,::->- ••~ ~.:"',, 1 .,;- ;'~.._ . . . . , • ~·:",:~.iJ~-

sector in Southern Rhodesia and Northern Rhodesia, Efforts are made to

" , ' ....-, ,-"-".-;,c.:t- ",C". ,,",,:- ••.• >'- - ' " ," - . ' i '

,". fip in"the gaps arising from non-re~:poniseof building and" contra,c,ting

~. ., . . ".C. "",',-" : " ; ' , . . , ' ',' ~<." " .' ,.~,.;__

enterprises on ,the basis of ernp Loymarrt , The estimates Qf own-account

+:'c' '," ' " : " " , ' L;I~: .-\ <.,:,:: ~~. ",: ,., ,"' _.

construction of the agricultural secto~ in the two Rhodesias are

• , ' , L ' ...u

particularly weak, for arQitrary assumptions h~ve to be .made of the

" > , , , - .- .-;', . ::'- .. ;: ·YI(-,:-:'_:':r.;'i;"_~ :~' . ' ->,,'j

proportion of newly constructed. dams ,and tobacco barns th,at a,re own-

,.-~.- ' ',- "-'_-,::":U'~:':l._;- :~;'_r;>3~": ." " .. -":,F·~-.')Y:.!.:_'!"'l·-'"

.account constructed, the average cost of cons:;ructi9n.and the likely

': . , ' , ; - . "'.,_:,~,o;_ _:.,~ ---';:-":_"';.' ",1S::;- _':'~'~O:-• ..

ratio of other building and construction .on farms to tobaqco bij.rn and

dam construction. (Various field e";q,uiries of the

'~;~istry

^of

Ag~iculture

ha\tEl>a.ssiS'ted'in'thig respect). Nominal coat values'lire itfaddi'tion a;llP;i{~d·;tdthe·iilcrea.~e·sin'i:h.uri15erWr':im~'roveddW'e l'J'iftgs in 'the African rural areas in Southern' Rhodesia.

9.'Constarttp:r'jde eLemerit s i.nd:ei 6fbuilding costs;

are obtained bYd:efliitingw~'th::the'" .

-"f''''

) '..'

~E', . J; ,:- .--,- ,-. .. ' f

• Page 4

and known phys~cal

of the marketing boards •_..';..

obtained by

10. Plant, machinery and equipment: the estimates are carried out at the Federal level on the basis of imported plant, machinery and equipment and lccal production. The estimates suffer at present from lack of

reliable information cn distributors' mark-ups and changes in

distributors' stocks. The investment in pa.ssenger. cars is pcorly estimated by applying average prices of passenger vehicles to 30 per cent of

registrations. (The figure of 30 per cent fs'purely arbitrary). ' The investment in plant, machinery and equipment for the agricultural sector is sepa,rately estimated as an element of total plan~, ma chLnar-y and equipment for each territory from information given in theC'a~rtcultural

~ensU:se

sforSouthern Rhode sia and Northern' Rhode sia., fromdi:rec't ;returns from agricultural enterprises in Nyasaland, from the end-use tabulations on imports and from the analysis of government accounts.

11. The aggregates of recorded investment in plant, machinery and equipment in

~achterri

to';yJJ are compared with the total

e~timat'e

^of

p:La~t, ~i6hinery

and.

equipment for theFederation~l'he^{residual uri-} r~(l';rded. amount is allocated pro rata to the recorded territoria.l investments to arrive at the total investment in plant', machinery'and

eqUipment'f~r'each·territory.

This method is undoubtedly very

'we'~

^but

can only be amprovsd on with the re-establishment of terrfi6rlafforeign trade st~tistics. ^The unrec~rded element, however, has be'ell;eduoed considerably in recent years through the extension of questionnaire enquiries and'the territorial allocation can ~"r'"these recent years be viewed with greater 'equanimity.

,12. The cons.tant value estimates are obtained by deflating each element of plant, machiner~ and equipment by appropriate unit value .indices

especially ccns~ructed.fromtrade statistics.

13. Stocsk: the estimates are based on recorded data on 'changes in stocks from direct returns and industrial censuses

changes in stocks of minerals, livestock and. grains The value of the known physical change in stocks is applying average annual market prices.

11

including, of course, the estimates for agriculture.

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14. The deflation of reoorded value stock changes is fairly arbitrarily carried out using ad hoc price or unit value indices that appear

appropriate. The value of physical changes in stocks at constant prices is obtained by applying the average market prices in the base year.

15. Sector Allocation: The figures published for the official sector and private corporations are recorded amounts and those for the African rural household sector are estimates of own-account construction of improved dwellings in Southern Rhodesia.

unincorporated enterprise is obtained by estimates of capital formation.

The personal sector including difference from the total

16. Allocation by industrial use:

in the case of agriculture, whereas recorded figures. A large residual notably in recent years •

Capital formation is estimated the figures for other sectors are results but this has been narrowed