Cape Times

Frus­trated by plan­ners dis­re­gard­ing ev­i­dence

- DR PALI LE­HOHLA Dr Pali Le­hohla is the for­mer South African Statis­ti­cian-Gen­eral and for­mer head of Statis­tics South Africa.

AT 22 On Sloane, where I pre­fer to be called an in­tern rather than a res­i­dent re­search ad­viser, be­cause there is so much I learn there from the young stars, my ap­proach has been to in­cul­cate the idea of un­der­stand­ing con­sump­tion mar­kets, to which pro­duc­tion should re­spond.

In my work as a statis­ti­cian-gen­eral I have been frus­trated by the ut­ter dis­re­gard for ev­i­dence by those as­signed the task of plan­ning, in­clud­ing ig­nor­ing what is cru­cial for the Africa Con­ti­nen­tal Free Trade Agree­ment.

The in­ter­na­tional com­par­i­son pro­gramme is the big­gest con­sump­tion mar­ket re­search glob­ally that bean counters un­der­take.

Africa hardly looks in that di­rec­tion, ex­cept when this data is for use for rates for sub­sis­tence al­lowance in world cap­i­tals or when it en­ables draw­ing rights from the In­ter­na­tional Mone­tary Fund and the World Bank.

Re­cently, I vis­ited Kaduna in North­ern Nige­ria. I mostly con­fined my­self in the ho­tel, the Asaa Pyra­mid, which boasted sev­eral halls for con­fer­ences and meet­ings. I started mus­ing on the In­ter­na­tional com­par­i­son pro­gramme and mar­kets of con­sump­tion.

In 2014, when as bean counters we re­leased the pur­chas­ing power par­ity (PPP) ad­justed gross do­mes­tic prod­uct (GDP) for the world, and Nige­ria be­came the big­gest econ­omy in Africa on that ba­sis, I re­ceived calls from pol­icy mak­ers in South Africa ask­ing whether it was true.

Me­dia fu­elled the frenzy as South Africa felt un­seated by Nige­ria.

PPP ad­justed GDP says what an equiv­a­lent bas­ket of goods and ser­vices will cost you, as though you were bar­ter­ing.

For three times the space of a ho­tel room in France, for the al­most 2-star ho­tel I found my­self in Kaduna, I paid $6 (R83) a night bed and buf­fet break­fast and sup­per $3– a mere R125 equiv­a­lent.

The two-hour train ride in first class from Abuja to Kaduna was $10.

Kaduna Univer­sity boasts some of the best in­tel­lec­tu­als the world has seen. Kaduna state has re­solved to root out cor­rup­tion, a dif­fi­cult Nige­ria pas­time cul­ture.

But the gover­nor and his ad­min­is­tra­tion are a state at work and Kaduna is a state to watch as they fo­cus on statis­tics and data for their de­ci­sions. Of the 8.7 mil­lion peo­ple, al­most 4 mil­lion are said to be work­ing.

With a mas­sive agri­cul­tural sec­tor and ap­parel in­dus­try, full em­ploy­ment is not im­pos­si­ble.

The ques­tion that an in­vestor would ask when faced with in­vest­ment op­tions in pro­vi­sion­ing for con­sump­tion mar­kets of goods and ser­vices would be: “On a pur­chas­ing power par­ity ba­sis, what is the price level index (PLI) of in­puts as well as of fi­nal house­hold con­sump­tion equiv­a­lents and for what mar­ket of con­sump­tion?”

South Africa’s PLIs are high, and with the in­ter­est rate cy­cle pos­si­bly now trig­gered in our econ­omy, Kaduna might be an at­trac­tive sleep­ing gi­ant.

Our yawn might be big­ger and our lower jaw could drop even fur­ther in dis­may when Nige­ria opens the gap of its PPP-ad­justed real GDP com­pared to ours in South Africa when in­ter­na­tional com­par­i­son pro­gramme re­sults come out next year.

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