The power of digitisation and digitalisation of economic and social phenomena as an important abstraction for tapping into value. Photo: Pixabay

JOHANNESBURG – South Africa is failing to plan for the long haul for reaching its growth targets, as the system it uses for planning is plagued with knowledge and skills asymmetries in modelling content and methods.

One has to look at how future value can be realised and the role of statistics in planning. Through modelling based on past recorded, digitised and digitalised experiences, future expectations are possible to map.

For instance, answers to the vexed question of unemployment, shared growth and development in South Africa can be made visible, and society can be mobilised behind such a future.

From November 11 to 13 the second Drakensberg Inclusive Growth Forum last year convened at the Champagne Sports Resort.

One example of future value is from Dr Hernando de Soto, the author of many books, and in particular The Mystery of Capital, who delivered a keynote address on property rights.

De Soto discussed how “blockchain property rights” can be digitalised into living capital as valuable assets worthy of exchange. 

He argues that the development of a transparent practice of property rights that assigns uncontested rights to individuals has the potential of unleashing trillions of dollars for the self-development of nations. 

In the main, the ambiguous right to occupation and ownership decreases the value of the asset, which otherwise could be used for purposes of raising capital. 

The relevance of his message would resonate in South Africa, where title deeds for shack dwellers who mostly occupy land illegally and necessarily do not hold the right to tenure, and people resident in traditional areas, are under communal rights to access.

Using the same technique of digitalisation, South African Maritime Safety Authority chief executive Commander Tsietsi Mokhele discussed the oceans economies. He expounded on what the oceans economies could mean for unlocking the potential for South Africa and the progress being made on that front.

At the inaugural session, I also shared my concerns regarding South Africa’s poor planning systems as a serious inhibitor to growth and development. It is not failure to implement, but a failure to plan in South Africa that is the enemy.

You cannot implement what you have never planned. We describe the planning phenomena shoddily, and then prescribe solutions without paying attention to diagnosis and predictive capability of the medicine we are prescribing to the problem we intend to solve. 

In South Africa, the capability of looking ahead both in terms of institutional and human resources resides only in the National Treasury and the SA Reserve Bank (Sarb). But even then the application of this capability is applied in cycles of three years to manage debt to gross domestic product (GDP) ratio, inflation and the growth prospects of GDP. 

The forward-looking modelling capacity in these institutions have not been deployed in forecasting or answering the question of joblessness, poverty and inequality.

Little wonder that the growth strategy of the recently released Treasury document is not explicit on these National Development Plan (NDP) objectives. This task may not be one for the Treasury nor the Sarb. It is the responsibility in a large part belonging to the Department of Trade and Industry . We need not look far for examples of this. 

Japan deployed the technical aspects of modelling the future through this ministry to unprecedented success in industrialisation. 

In South Africa such ability to look into the future is sorely absent in trade and industry, as well as other real sector and social sector government outfits by default, deferring responsibility of these to the Treasury which by nature of their forecasting tools are confined to three-year cycles, because of market volatilities that they have to respond to. 

These knowledge asymmetries inhibit South Africa from long-term sighting of the future, with enduring plans that could emerge from the likes of the oceans economy. 

Over a period of 30 years the Applied Development Research Solutions (ADRS) developed a suite of models for a number of countries, including South Africa. And because of the wealth of data the ADRS, which a number of departments and provinces such as higher education, the dti and Gauteng used their services.

The most recent and playing out in the public domain is the ADRS engagement with the dti, where the modelling outcome to 2030 illustrates that through an informed combination of strategies it is possible for South Africa – despite the desperate depths it has fallen to – to approach the NDP targets.

In a transparent articulation of seven interventions, which open up macro-economic limits of the inflation target among others, the modelling illustrates the path South Africa has to walk and how the benefits of this growth would be inclusive. This was one of the presentations made in the Drakensberg. 

In addition to this, the modelling infrastructure was available for delegates to explore and see how these scenarios were constructed.

In 2014, while I was in office as the statistician-general of South Africa and frustrated by the incoherent messages that would emerge from the Treasury and the dti, I sought to search for use of the rich statistical assets and holdings that Statistics SA had. I came across the ADRS modelling capability which built these, using Stats SA data. 

In an attempt to break the logjam of planning and provide a line of sight for all, I sent a team from StatsSA and the Department of Planning, Monitoring and Evaluation to California, US, to undertake deep training and interrogation of the models. The reports from the training confirmed the great value these models hold. 

The ADRS models have undergirded the Idlulamithi scenarios for South Africa and in this way the scenarios are not just story lines, but are now intellectually immersed in the platforms that can serve planning systems. 

This illustrates the power of digitisation and digitalisation of economic and social phenomena as an important abstraction for tapping into value. Hernando de Soto makes a valid point.

Dr Pali Lehohla is former statistician-general of South Africa and former head of Statistics SA. He’s at www.pie.org.za and Twitter @PaliLehohla.

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