Background and Context

The International Comparison Program (ICP) is a global statistical initiative established in 1965 under the auspices of the United Nations Statistical Commission to produce internationally comparable price and expenditure data as well as purchasing power parity (PPP) estimates.  It has now been conducted in six phases at an interval of about five years. In Africa, the ICP has been implemented since 2005 by the African Development Bank Group (AfDB) taking over from EUROSTAT (the Statistical Office of the European Communities) who coordinated the African program from the beginning to 1993.

The main objective of the ICP-Africa is reinforcing Statistical Capacity Development of regional member countries (RMCs) generating data for the 2063 agenda, the 2030 SDG Agenda and the Bank’s High 5s. The data produced by RMCs through the ICP facilitates measurement of performance by RMCS on 28 indicators for 15 SDGs and 4 High’5 Priorities.

The ICP produces internationally comparable price and expenditure data, as well as purchasing power parity (PPPs) estimates to facilitate cross-country comparisons of price levels, GDP and related economic aggregates in real terms.

The genesis of the ICP was an early recognition that measures of economic aggregates based on official market exchange rates do not reflect real differences in price levels between countries, and are thus patently unsuitable for policy decisions, which in principle relate to volumes free of price distortions. By establishing purchasing power equivalence, where one unit of currency purchases the same quantity of goods and services in all countries, PPP data allow cross-country comparisons of economic aggregates and structures based on a common currency and free of price and exchange rate distortions. Therefore, PPPs allow comparisons of market size, the structure of economies, the material wellbeing of populations, and what money can buy.  

IMPLEMENTATION STATUS

Close to 180 countries world-wide have participated in the last 3 ICP rounds of 2005, 2011, 2017 and the current round of 2021. The program is globally managed by the World Bank and implemented by region – thus: Africa, Asia and Pacific Islands, South America, the Commonwealth of Independent States (CIS) and Russia, Western Asia and Europe. The regional programs are managed by various institutions and lead countries. AfDB manages the Africa program comprising 52 RMCs in the 2021 round. Eurostat and OECD manages the comparison for European countries. In South America, the work is managed by the UN-ECLAC; In Asia, by the Asian Development Bank; in Western Asia, by the UN-ESCWA and in the CIS countries by Russia and the CIS Secretariat.

In Africa, unlike in the other regions, the AfDB, has designed the ICP-Africa to also serve as a capacity building platform for price statistics and national accounts in participating African countries. The 2021 Round activities are being undertaken as part of the AfDB’s overall Statistical Capacity Building (SCB) Program approved by the ADF Board in November 2014. Within the Reference Regional Strategic Framework for Statistical Capacity Building in Africa (RRSF) the Bank has been implementing the ICP-Africa through its selectivity approach aimed at reinforcing sub-regional integration and capacity with support mainly through various regional and sub-regional organizations, and Statistical Training Centres. This is re-enforced by very strong partnerships with UNECA, the World Bank, IMF, PARIS21, and African Union (AU).