State of Implementation of ISIC and CPC Isaac K. Ndegwa KENYA NATIONAL BUREAU OF STATISTICS

Introduction.  ISIC has been widely used nationally in classifying data according to kind of economic activity.  Central Bureau of Statistics (Currently KNBS) published a modified UN ISIC Rev. 2 of 1968 in the Kenyan Statistical Digest of  Document had ten major divisions numerically numbered from 1 to 9 and group 0 reserved for activities not adequately defined.  Revision of the domesticated Kenya International Standard Industrial Classification (ISIC) Revision 2 of 1968 started as a result of development of the ISIC Rev.3 by the United Nations Statistics Commission.  This started way back in 2001 but not adopted till 2004.

Current Status  Currently, using a blend of both ISIC rev.2 and Rev.3.  This is both at the bureau and other institutions providing data to the KNBS.  There have been attempts to migrate to Rev.3 wholly albeit with some technical challenges.  Key sections within KNBS already in ISIC Rev.3 include: Manufacturing, Agriculture and National accounts.  Other institutions that have largely migrated to ISIC Rev.3 include the Kenya Institute of Public Policy and Research (KIPPRA) and the Central Bank of Kenya.

Domesticated Version of ISIC Rev.3 for Kenya  The conceptual framework adopted during the design and construction of the Kenya ISIC Rev. 3 is similar to that used in the UN ISIC Rev. 3  ISIC here used as a classification according to the kind of economic activity and not a classification of industries or goods and services.  The activity carried out by a statistical unit is the type of production in which it engages. It is a characteristic of the unit according to which it is grouped with units for certain statistics e.g. industrial statistics.  The present Kenya ISIC Rev. 3 has seventeen major divisions organized alphabetically from A to O with 64 divisions.

Domesticated ver CONT’D  In conformity with the United Nations Statistical Commission recommendation that each member country should switch to ISIC Rev.3, a Working Group was formed at the then Central Bureau of Statistics (CBS) in the first half of the calendar year  The aim of the Working Group was to domesticate the revised ISIC Rev. 3 to reflect the Kenyan situation.  The Group finally produced the Kenyan version ISIC Rev.3 for application by various users.  It was expected that the application of this domesticated ISIC Rev.3 would generate statistics that is internationally comparable with the rest of the world.

Domesticated Ver Cont’  In revising ISIC Rev.3 for Kenya, the KNBS team adopted the United Nation’s ISIC codes to the extent possible  In a few occasions, some of the activities were lumped together. In such cases, activities were separated and new codes given to those activities which are important in Kenya without disturbing the United Nation’s framework of classification.  Example, coffee that was formerly lumped together with “other crops not elsewhere classified” was separated and given a code because of its relative importance to the economy.

Key Objectives of KISIC  Act as a tool for harmonization and fostering international comparability of data.  Promote the development of sound national statistics system.  Get detailed data by kind of activity for production statistics, National income and other economic statistics, demographic and social statistics for labour force and employment analysis, and indication of effectiveness of government macro planning policies.  Assist those organizations that want to invest in various industrial sectors.  Assist in updating the central register of establishments maintained by the Kenya National Bureau of Statistics

Linkage With other Systems  The Kenya ISIC Rev.3 is linked with the existing statistical systems such as the System of National Account (SNA).  It’s not yet linked to CPC  Plans underway to extend linkage to Central Product Classification (CPC).

Challenges/Issues  Some sections still using ISIC Rev.2.  Delay in revising some of the methodologies to accommodate Rev.3.  Change of systems has particularly been noted to delay the adoption process.  Currently our national accounts (NA) use a blend of different levels of ISIC Rev.3 i.e. at 2, 3 and also 4 digit (mainly in Manufacturing and Agriculture).  Where data is received in ISIC Rev. 2, it implies the section has to apply estimation procedures to some of the data e.g employment data  Although the bureau domesticated ISIC Rev.3, other institutions like the revenue authority still give data (VAT for quarterly GDP) using Rev.2 format.  The issue of outdated master frame which uses rev.2.

Current efforts to address some of the challenges  The updated version of ISIC Rev. 3 has already been circulated to other producers/users for application  A team has been constituted to look at the recently released ISIC Rev.4 with a view to adopt it.  KNBS team is working closely with other institutions like KRA to help them adopt the new version of ISIC in their data capturing system.  Plans are now underway to overhaul the business register. KNBS is in the second phase of updating our master frame using ISIC Rev.3.

Conclusion & Way Foward  As a major duty, KNBS remains committed to produce and disseminate revised and updated versions of subsequent versions of the International Standard Industrial Classification document e.g. the ISIC Rev.4  KNBS needs the technical support in applying the ISIC classifications and CPC in all systems.

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