EDITORIAL: Starving Stats SA of funds endangers its future

You may never have heard of David Everatt, but all policymakers in the country know of him, or at least they should.

A professor in the school of governance at Wits University, he is chair of the SA Statistics Council, a 23-member panel that signs off national statistics.

It is with his endorsement, and that of the panel he oversees, that the official data collection agency Stats SA can produce data that enables the government, international ratings agencies and the private sector to formulate policies and make decisions about the trajectory of the economy. It also helps with decisions such as on the development of new shopping malls or vehicle assembly plants.

But the panel is threatening to resign en masse over funding cuts that  jeopardise  the credibility of national data, including economic indicators crucial for any decision ratings agencies might take on sovereign debt. This data also helps decide if Reserve Bank governor Lesetja Kganyago should cut interest rates.

It’s easy to sympathise with the panel.

According to its most recent annual report, Stats SA’s baseline budget allocations were reduced by R141m in 2017/2018, R215m in 2018/2019, and R254m in 2019/2020 over the medium-term expenditure framework, much of which has had to come from staff compensation budgets.

Cash crunch

Other than the recruitment of statistician-general Risenga Maluleke towards the end of 2017, the agency that reports to the minister in the presidency, Jackson Mthembu, has made no new appointments since 2016, and it has frozen all staff promotions.

To cope with the cash crunch and staff shortages, Stats SA has been reducing sample size surveys, which over time will lead to a wider error range and dropping indicators such as the poverty survey, which is crucial if the government wants to reduce the number of destitute people.

Few, including this newspaper, would doubt the reliability of the work done by Stats SA, which meets more than 90% of its performance targets. It has also received five successive clean audits, meaning its management of its finances was free from significant misstatements, incorrect values placed on assets, liabilities or other obligations.

But it will not be unreasonable to assume those workers left to take extra responsibility for about 600 people that should be hired will be looking elsewhere to lift the burden off their shoulders.  

And since Stats SA is not promoting anyone, the staff, some of whom work six or seven days a week, have another reason to look elsewhere to advance their careers, stripping the agency of skills vital to crunching huge volumes of data about our society and the economy.

Bleeding jobs

True, the government has put aside extra money, about R3bn, for Stats SA to hire thousands of people to collect population census data. However, that same data would still need to be analysed and interpreted by the core Stats SA’s staff, which, by the looks of things, will remain thinly stretched when census data is released in 2021.

The SA Statistics Council is asking for R200m to top up Stats SA’s budget. It does not sound like a lot, considering how central their work is to the functioning of the government, which presumably put the shortfall down to below-target revenue collections at the SA Revenue Service in an economy that is bleeding jobs.

But for the overworked employees at the agency it is painful to watch the same government trawling its coffers to ensure state-owned companies such as SAA stay afloat.

We have been arguing for a long time that SAA is not crucial to the country’s economic revitalisation agenda, but President Cyril Ramaphosa seems unwilling to make a decision that will upset labour or left-leaning elements within the ANC.

It would be suicide for the government to ignore the cash crunch facing Stats SA, which needs to develop new indicators and techniques to measure and understand an economy that is rapidly becoming more digital.