1. MEASURING INFORMAL ECONOMY THROUGH HOUSEHOLD SURVEYS: TANZANIA Expert Group Meeting on Statistics for SDGs: Accounting for Informal Sector in National Accounts 11-14 January, 2016 - Addis Ababa, Ethiopia (Presented by ECA)

2. Outline The problem The data and variables used  The 2012 Integrated Labour Force Survey  The 2013 census of industrial production The estimation method Results Challenges, way forward

3. The problem The National Bureau of Statistics collects data on large, medium and small scale registered establishments in their routine official statistics; the most reliable statistics refer to establishments with ten or more employees and from 5 to 9 employees Informal units of less than 5 employees are not collected through the routine statistics The production of goods and services by informal sector is seldom captured completely by lists based production survey, as the results it shows the imbalance between supply and use side measurements, hence the need for complete coverage of goods and services produced by informal sector enterprises in balancing the supply and use of goods and services. Small coverage of informal sector leads statisticians to prefer expenditure approach as proxy to production Objective: To estimate the output and VA part from the informal sector in the national accounts.

4. Sampling frame derived from the 2012 Population and Housing Census Sample selection based on a stratified three-stage sample design  1. Systematic selection of 480 Enumeration areas within each stratum using PPS  2. Systematic sampling procedure for selecting 24 households from each selected EA  3. Selection of respondents for Time Use Module: One households member aged 5+ years. Among these households, 4,800 were in Dar es Salaam, 3,840 in other urban areas and 2,880 in rural areas. The questionnaire helped evaluate the number of the informally engaged persons aged 15+ years by economic activity, sex, and type of contract The ILFS identified household unincorporated enterprises, which engage at least partially in market production (PU) Data used – The 2012 Integrated Labour Force Survey in Tanzania Mainland

5. The sampling frame: 2013 Census of Industrial Production was based on the establishments which were operating in 2013 as per results of the listing exercise for the 2013 CIP conducted in April 2014 in all the 25 regions of Tanzania Mainland. The sample size: 13,867 establishments, distributed by number of employees and ISIC categories. Data used – Census of Industrial Production (CIP)

6. Employment: male and female Compensation: salaries, benefits, paid families, depreciation, and tax production) Sales: finished goods, resale of goods, value of re sale, fees received, work done for others Inventory: finished goods (closing and opening), Goods in process (Closing and opening Rental of buildings Other receipts Purchases: raw materials, supplies, others Inventory: raw materials (closing and openings), supplies & materials (closing and openings) Expenditure: water bill, electricity bill, travel, repair, legal, advert, and bank charges, printings and others Data used – Census of Industrial Production (cont.)

7. Estimation methods of the NA aggregates The ILFS provides  the number of the unincorporated enterprises, which engage at least partially in market production, by branch of activity and corresponding sizes.  the average hours per workers and branch of economic activity The CIP provides, for the different branches of economic activities, the benchmark output and value added ratios for informal sector which can be extrapolated to get the estimates for the unincorporated enterprises in the informal sector. The size of the unincorporated enterprises in the IS are converted in number of full time equivalent employees. The national accounts aggregates are then directly derived based on the combination of the output and VA ratios and the size of the PU in FT equiv.

8. Statistical Calculation by enterprise approach Sales = finished goods + (resale of goods-purchases value of resale) +others fees received + work done for others +rental of buildings + other operation receipts) Change of inventory = (closing –opening) finished products +(closing –opening) goods in progress Gross outputs = Sales + change in inventory Intermediate Consumption = raw materials + supplies + others rental of building + net insurance + services + electricity +water + water + postage + repair + legal +advert +printing + bank charges +printing +others services Value Added = Gross outputs - Intermediate Consumption

9. Results: Employment (number) in the informal Sector 15+ years Tanzania Mainland Employment (number) in the informal Sector 15+ years Tanzania Mainland Economic ActivityMaleFemale Total% of total Mining and quarrying 141,12543,205184,330 4.2 Manufacturing 227,717199,046426,763 9.8 Electricity, gas, steam and air conditioning supply 1,9180 0.0 Water supply; sewage, waste management and remediation act. 1,9479242,871 0.1 Construction 267,4512,803270,255 6.2 Wholesale and retail trade; repair of motor vehicles and mot 967,9101,111,6992,079,608 47.9 Transportation and storage 254,9507,687262,638 6.0 Accommodation and food service activities 105,162526,845632,007 14.5 Information and communication 1,8228462,668 0.1 Financial and insurance activities 5,0426,27411,316 0.3 Real estate activities 3,1489454,094 0.1 Professional, scientific and technical activities 6,3801,8658,245 0.2 Administrative and support service activities 21,4527,43128,883 0.7 Public administration and defense; compulsory social security. 4,7151854,900 0.1 Education 5,3559,13314,488 0.3 Human Health and social work activities 15,40217,90533,307 0.8 Arts, entertainment and recreation 6,0034,59010,594 0.2 Other service activities 60,55385,999146,552 3.4 Activities of households as employers; undifferentiated good 28,295190,848219,144 5.0 Total 2,126,3492,218,2304,344,580 100.0

10. Results :

11. Average Usual hours of work per Week 15+ (National Definition ) 20062012 StatusTotalMaleFemaleTotalMaleFemale Paid Employment575855636659 Self Employed555949657060 Unpaid384136575458 Own Farm404238485245

12. ISICnumber Gross Output Intermediate consumption GVA Comp. of employees Taxes less subs CFC Gross Operating Surplus/ Mix Rev Net Operating balance CodeenterpriseSALECH INVTotalPurchasesother ICmat & suppTotal 3151213,205-5813,1475,6642,5645358,7624,3853,65511,107729-377 31753,357-843,2731,125808-831,8501,423695252726674 3188758,09295959,05036,75510,50147647,73111,3197,36913503,9493,599 32051,515-361,4791,055264-451,274205539344-337-381 322715,004-10514,9008,0131,981-1219,8735,0263,87606881,150462 3241665120785173010318467609146-143-189 326617,3322217,35412,9381,294-16814,0653,2892,22231,0141,06349 32742,550-6011,9491,3091,243-32,549-6001060138-706-844 32864,078134,0922,206610-432,7731,3191,257121960-159 331511,7674611,8136,484536-2306,7915,0221,759128273,2512,425 336714,992-32114,67110,545811-611,3503,3212,08826181,231613 33711,6070 21732005371,0712870288784496 Total146144,163-44144,11986,32821,232312107,87236,24624,464255,39111,7576,366

13. Challenges, Improvements and way forward Use major surveys/censuses to estimate under reporting of production for all types of production (formal and informal), especially when all large corporations are surveyed and a sample of registered and unregistered medium and small corporations is surveyed, which helps to get benchmark output and constant ratios to estimate the value added for the whole economy. To improve the reliability and frequency of police report statistics on illegal activities such as drugs and prostitution, smuggling etc., so as to allow their inclusion in GPD.

14. Thank you.