Malawi: Technical Assistance Report on the Price Statistics Mission

EXECUTIVE SUMMARY? In response to a request from the Malawi authorities and in consultation with the AfricanDepartment (AFR), I undertook a technical assistance (TA) mission to Zomba during theperiod September 16–27, 2013 to assist with improving prices statistics, including the fullconversion to direct pricing for the import and export price indexes (MXPI) and reviewingthe new producer price index (PPI). This activity (14STJ6300) was funded by the EastAfrica Technical Assistance Center (East AFRITAC)1 and undertaken within the contextof the following project: Price Statistics STA_MWI_2008_05.? Important aspects for the mission to address included the following: (i) review the workundertaken to date on developing experimental unit value based MXPI; (ii) preparedetailed plans for the development of quarterly import and export price surveys;(iii) develop the methodology for the replacement of the unit values with survey-basedprices in the index compilation systems; (iv) review the new PPI and consider anypossible future enhancements; (v) provide training to staff on data collection and indexcompilation; and (vi) document the methodology and computational proceduresdeveloped during the mission.? In order to make as much progress as possible in relation to all the phases of the indexconstruction during the period of the mission, the focus was placed on the development ofan import price index (MPI). The documentation relates to an MPI but the MalawiNational Statistics Office (MNSO) will be well positioned to apply the same techniques,principles and procedures to develop an export price index (XPI). The development of theXPI will be more straightforward; experience has shown that the development andmaintenance of an MPI is much more complex.? The MNSO proceeded to follow the work program developed during the previous missionto initially compile experimental, unit value-based indexes then progressively replace theunit value price indicators with direct survey-based prices.? However, MNSO could not proceed to compile the MPI because of problems with thecredibility of the unit values. This follow-up mission undertook an analysis of the sampleof import unit values by country selected for the MPI and found major problems withmost of the basic data, particularly in relation to the reported quantities and units ofquantity. Therefore, it is not feasible to proceed to compile the indexes until quarterlytransaction prices are available from import and export price surveys.? It is essential that resources be provided to fund a program of import and export pricesurvey initialization interviews and the subsequent ongoing quarterly price collections.