Regionalized Social Accounting Matrix for Yemen - A 2014 Nexus Project SAM

A Social Accounting Matrix (SAM) is a representation of an economy that shows the circular flow of all transfers and real transactions between sectors and institutions. The SAM, which is a square matrix, describes the flows of incomes from activities, taking the form of factor remunerations, that are consequently received by the households for consumption on goods and services. The accounts in the SAM are the production activities, commodities, institutions, and factors of production. According to data availability, the production activities can be further disaggregated to include more detailed information on sub-sectoral or regional production. Similarly, the factors of production could be differentiated by the level of skills or the location of employment. Households can be disaggregated by income quintiles or by rural and urban residence.

A SAM disaggregated with regards to activities, households, and subnational regions is important for economic analysis and planning. Such SAMs provide rich datasets to help decision makers in developing, designing, and evaluating regional economic and investment policies.

The Central Statistical Organization (CSO) of the government of Yemen, in collaboration with the International Food Policy Research Institute (IFPRI), have developed the first regional SAM for Yemen. The SAM is based on economic information for Yemen and its regions for 2014. This regional SAM will be used as a backbone dataset for Computable General Equilibrium (CGE) modelling of the economy of Yemen. It will be of particular value for estimating the economywide effects of the ongoing conflict in Yemen and the costs of economic destruction across the country and in different regions. Such an analysis will help in exploring the feasibility and likely impact of possible scenarios for the reconstruction of Yemen’s economy and how much investment will be required for recovery and reconstruction, especially with regards to the rebuilding of public infrastructure.

To build the Yemen SAM, in addition to CSO datasets, other data was obtained from the Ministry of Planning and International Cooperation and from the Ministry of Agriculture. The regional SAM builds on the earlier 2007 SAM (IFPRI 2014) and made extensive use of the subnational information in the Yemen Household and Budget Survey (HBS). From various sectoral surveys, information was also drawn on disaggregated industrial and services activities at the governorate level.

The new regional SAM for Yemen includes 57 productive sectors – including 20 agricultural, 25 industrial, and 12 services activities – in four subnational regions: Highlands, Tihama, Aden, and Hadramaut. The regional SAM has 10 factors of production. Labor is differentiated by three educational levels and between the public and private sectors. Capital is disaggregated into four types: crops; livestock; mining; and other. Additionally, the new SAM has 60 representative households. Households were split according to per capita expenditure into five quintiles by rural farm, rural non-farm, and urban areas. These 15 household groups then were differentiated across the four subnational regions. The regionalization of the Yemen SAM for the year 2014 was done for sectoral production, i.e., agriculture, industry, and services; factor markets; and household groups. All of the other accounts in the SAM are at the national level. In total, the regional SAM for Yemen incorporates 379 rows x 379 columns.