ZIMBABWE has not had official inflation figures for the past four months. The Central Statistical Office (CSO) has remained silent on the figures.
Their official excuse has been that there are no products to measure inflation. The effects on decision making in companies has been huge. Business Editor, Shakeman Mugari, spoke to CSO director, Moffat Nyoni about these problems. Below are excerpts from the interview.
Mugari: Can you explain why the CSO has not managed to produce inflation figures for the past four months?
Nyoni: It is because we donâ€™t have the required number of observations that we need to get the inflation figures. In most cases we canâ€™t have a decisive figure because there are no products to observe.
Mugari: So when is the market going to have the inflation numbers? You would understand that these figures are important for decision making in business.
Nyoni: I canâ€™t say I have an answer to that. I canâ€™t for sure say when we will have the complete inflation figures.
Mugari: What do you mean when you say you donâ€™t have enough observations?
Nyoni: For us to come up with inflation figures for a particular time we have to observe a product both in urban and rural outlets. You will notice that you might observe a product in an urban outlet but not in a rural outlet. The same happens in urban areas from shop to shop.
Mugari: What then is the solution to this problem because surely businesses still need to make crucial decisions using that figure?
Nyoni: I have no solution that I can think of at the moment. Maybe things might improve because of the removal of import duty on basic products. At least that might allow us to make some observations for us to come up with the figures. There is no solution to this problem for as long as there are no products in the shops.
Mugari: So that means you will be measuring the imported goods.
Nyoni: Yes we do consider and measure them for as long as they are on local shelves.
Mugari: There are a lot of listed companies that have not released their results because of the lack of inflation figures. What are these companies supposed to do?
Nyoni: Well I cannot say anything about that at the moment but let me hasten to say that we might have to come up with some sort of estimations. These are obviously things that we have to discuss and agree on.
Mugari: Does the CSO have the capacity to come up with accurate inflation figures? I ask because for some time now people have talked about official inflation figures and unofficial numbers. Obviously many people donâ€™t believe some of your figures.
Nyoni: I have no reason why I should answer to the contrary. We do have the capacity. The problem might arise on the original Incomes and Consumptions Savings Index that is in use. This is where we get the percentages for the weighting in the basket. When those weightings are outdated, then the inflation figure might not be accurate. I do admit that given the rapid change in the economy we might not have been able to capture these changes in the basket. The last index was done in 2001. We are currently working on another that will be concluded on May 31.
Mugari: Your last figure was 165 000%. Was that official?
Nyoni: Well that too was not entirely official. We did not quite release that figure because we did not believe that our findings were conclusive enough to come up with an inflation figure. It was not based on firm measurements and data.
Mugari: You say it was not official. How did it get to the public if it was not a true reflection of the situation on the ground? Is that not misleading?
Nyoni: What happened is that the figure got to some few people who then took it around.
Mugari: I would assume that it was in February. Where are the figures for the months that followed?
Nyoni: But I told you we donâ€™t have such figures.
Mugari: Are you making an effort to get them at all?
Nyoni: Yes we are trying to compile the data. We are trying to see whether we can patch up in some areas?
Mugari: Do you mean patching up important economic data?
Nyoni: But there are no products. Obviously some estimates have to be reached.
Mugari: Why canâ€™t you patch up the figures for April?
Nyoni: There is nothing conclusive yet for the month of April.
Mugari: A news agency reported last week that inflation for April was 1 000 000%. Now we have our own information indicating that inflation is actually 1 600 000%. Have you heard about those figures?
Nyoni: Yes somebody pointed that out to me. I canâ€™t comment on them as we do not have anything of our own to make a judgment on what others have.
Mugari: Have some listed companies raised the issue of inflation figures with you?
Nyoni: Yes some have come to us and some have written. I have heard of such problems.
Mugari: So what did you tell them to do?
Nyoni: Well we have not made official responses yet but obviously we have to agree on some sort of estimates. We tell them we do not have the official figures. There are just no figures at the moment.
Mugari: The CSO canâ€™t produce inflation figures. At least it has shown over the past six months that it cannot get the inflation figures. Tell me what the workers at the office spend most of their time doing?
Nyoni: Inflation is only one of our products. We have a number of products. We compile data on exports and imports. We also measure migration, unemployment and industrial production. There are many other products.
Mugari: Obviously you have the same problem of availability on those issues. What exports are there to measure? What production is there to measure?
Nyoni: Yes the problems are the same.
Mugari: Perhaps you might also tell us whether the unemployment rate is still 80% as economists and newspapers continue to say.
Nyoni: That figure is an exaggeration. From a statistician point of view that figure means that 80% of the people are being fed by someone else. We must also know that even those people who sell tomatoes are in a way making a living and therefore working.
Mugari: So what is the figure?
Nyoni: The last measurement was in 2004 and 2005. The figure we got then was 11%.