JOHANNESBURG - South Africa can no longer adequately measure poverty and inequality because the Income and Expenditure Survey, the rock bed of the Consumer Price Index (CPI), is not funded - a red flag for South Africa Inc.
Statistics SA (StatsSA) and I in 2017 warned that the statistical D-Day for South Africa was in sight.
Last weekend Sunday papers published two items that left me shell-shocked. One was reflecting the repo rate trends and it had images of who the leaders of the SA Reserve Bank were for these different points in time.
The other was an interview with Patrick Kelly, the head of prices at StatsSA,, where he declared that for reasons of financing to the tune of R290million the Income and Expenditure Survey would not be conducted.
He intimated some gymnastics they will undertake to try and fill the gap and, to his credit, said the quality of the CPI will be low.
Sadly, for no fault of his, Statistician-General Risenga Maluleke has failed South Africa’s entitlement to official statistics and is in violation of the law and the fundamental principles of official statistics.
I, like everyone else, know that South Africa does not have money. In my final annual report in 2017 I warned that the asymmetrical cut the National Treasury made for the Medium Term Strategic Framework could kill StatsSA.
The cut was more than five times the Treasury had for other departments - a matter that I drew to the attention of the Statistics Council, former minister Jeff Radebe, the Treasury and the Portfolio Committee.
So dire was the situation that I had court papers ready to serve on the Treasury until Radebe promised that the matter would be addressed.
The question was who would take responsibility for over-expenditure in the financial year.
It was not going to be StatsSA.
The consequences of the cuts are being realised today.
Two critical measures have already suffered - the Living Conditions Survey, which measures poverty, and the Income and Expenditure Survey, which measures the CPI. So South Africa can now not measure the priority of priorities - poverty and inequality.
Unemployment has survived, because the Quarterly Labour Force Survey continues to be measured. The question we have to ask is whether we, South Africa Inc, are able to learn as a living organism.
Just as a reminder, in 2003 I messed up the measurement of the CPI and the sharp up of the repo rate in the graph was a consequence of the error in the CPI. And the subsequent rapid down was a result of the correction. This mistake cost society more than R50billion.
This happened because I did not have R6million to collect data for the housing index computation in the CPI, instead it was imputed forward. We learnt from this mistake and the government funded the institution well.
StatsSA did not do what we did, because we were superhuman beings. We were committed and did what was right. We were funded well to achieve the objectives.
Minister Trevor Manuel and the Statistics Council supported my efforts to correct this mistake and for it never to be repeated. CPI is a dangerous index.
Left in the hands of lunatics it is a devastating weapon. Argentina once tampered with the CPI from about 2005, with devastating economic effects.
Fortunately it is now on the mend and credited StatsSA for supporting it and speaking out against their violation of fundamental principles of official statistics.
Zimbabwe, which is currently in the economic doldrums, has recently blacked out the publishing of CPI.
Mboweni, Treasury director-general Dondo Mokgajane, central bank governor Lesetja Kganyago and Maluleke know about the effects of this gun too well as do their predecessors in Trevor Manuel, Maria Ramos and myself.
But it is now repeated under the eye of current players who knew and experienced the devastating consequences.
Maluleke and Kelly need real data to measure.
Any imputation gymnastics Kelly alluded to will provide a poor picture of the CPI. What South Africa needs is a granular and not a grainy picture. Mboweni, Mokgajane, Kganyago and South Africa Inc are entitled to this.
Dr Pali Lehohla is the former statistician-general of South Africa and former head of Statistics South Africa. Meet him on www.pie.org.za and @PaliLehohla