Frustrated by planners disregarding evidence
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.