OPINION: Funding the fact finder of the nation
JOHANNESBURG - The dire straights of funding the fact finder of the nation, Statistics South Africa (Stats SA), puts us at serious economic and financial risk which in countries like Argentina and Greece got stymied into a massive political risk.
Statistician-General Risenga Maluleke has put the country on a seesaw. Two weeks ago, he told we had the lowest monthly consumer price index (CPI) number in a decade at 3.7 percent.
That meant the rate of change in the overall price of goods and services consumed by households grew at the lowest rate ever in the last 120 months.
We cheered as this held prospect for a consumer surplus, especially in these very trying economic times. But that happens if this low inflation is sustained going forward.
The Reserve Bank uses the CPI to set interest rates, trade Unions and employers use it to negotiate wages and Maluleke uses it as a deflator to generate the Gross Domestic
Product (GDP) in real terms as opposed to current or market prices.
This is why short charging Stats SA and failing to finance the income and expenditure survey (IES) which is the computational foundation of the CPI can plunge the country into a crisis.
We can continue to dance that the titanic is stuck in an iceberg.
Yet Maluleke’s deflators are beginning to be grainy because the CPI has not been refreshed in the last eight years. The quality rule is it it should be run once in five years and nothing is coming from the National Treasury for Maluleke to perform this crucial task in support of economic measurement.
Soon StatsSA like the SAA will join the long list of companies and institutions that have been disabled.
According to the companies register, no less than 3000 companies have been comatose and subjected to business rescue. Top on the list are construction companies whose value has been destroyed.
Group Five has been on its knees and even business rescue cannot not rescue. So was Basil Read which has begun to strip its assets as the sun seemingly long set on construction in South Africa. A chain of Gupta companies are on business rescue too and include mining.
So what is the song of the numbers Maluleke?
He says agriculture, mining, manufacturing and construction sectors are bleeding. Only finance, government, trade and personal services have grown positively.
There could be a glimmer of hope based on the national account reported from the expenditure perspective. That gross fixed capital expenditure has grown at 4.5 percent is a good sign.
This happens on the back of purchases of machinery and equipment which are obviously imported - a downside given that the rand has played second fiddle to greebag and the sterling.
Would we conclude that the strong showing on gross fixed capital formation arises out of the investment fever? Maybe it is too early to tell but what is clear is that South Africa will have to revise its growth numbers possibly even further down.
It takes a concerted and simultaneous effort to get the economy out of the morass of negative performance. The dissonance in the structure and tempo of growth is a reflection of how disorganised the response has been.
If we deliberately decimate the only credible lens we have, StatsSA, and replace it with thumbs in our retinas, elbows in our ears and heads buried in the sand, it will take long for Christmas to visit South Africa.
Dr Pali Lehohla is the former statistician-general of South Africa and former head of Statistics South Africa.