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Politics, outdated methods cloud stats

ECONOMIC statistics play a pivotal role in guiding policy planners to draw up plans for the country’s development process.

Taurai Mangudhla

Concurrently, planners use them to monitor and evaluate given targets — a process which has political implications which is why it tends to be sensitive, with some authorities accused of massaging data.

After Zimbabwe reported astronomical inflation rates running into several billion percent at the peak of the country’s hyperinflationary environment in 2008, government decided to stop releasing inflation statistics. It was just as well as government figures had become implausible, to put it mildly.

The market was only left with access to estimates by independent economists and other research organisations.

Six years after adopting a multiple currency regime dominated by the United States dollar, and managing inflation at low levels, it seems credibility of the Zimbabwean government’s statistics is still in question.

The Zimbabwe National Statistics Agency (Zimstats) last week released inflation figures showing that the year-on-year inflation rate for December as measured by the all items Consumer Price Index (CPI) stood at -0,80%, shedding 0,01 percentage points on the November rate of -0,78%.

According to Zimstats, this meant that prices, as measured by the all items CPI, decreased by an average of 0,80 percentage points between December 2013 and December 2014.

The year-on-year food and non-alcoholic beverages inflation, prone to transitory shocks, stood at -2,70% while the non-food inflation rate was 0,04%.

The month-on-month inflation rate for December was -0,09%, shedding 0,60 percentage points on the November rate of -0,69%.

This means that prices as measured by CPI decreased at an average rate of 0,09% from November to December. The CPI for the month ending December 2014 stood at 99,53 compared to 99,62 in November and 100,33 in December.

Apart from credibility issues, there is a paucity of data on key social indicators in Zimbabwe, according to local think-tank Econometer Global Capital (Econometer).

The Zimbabwe Independent has established that Zimstats, sends a report to the Ministry of Finance, for instance, on its CPI research findings, before they are released for public consumption, putting into sharp focus the body’s lack of independence from political interference.

Econometer earlier this month carried a social survey which it said was inspired by “the need for evidence-based policy approach in contrast to over-reliance on secondary data compiled for convenience”, apparently referring to government statistics.

Econometer head of research Takunda Mugaga said it is clear figures are manipulated especially on the macro-economic framework to suit political needs.

For instance, last year Finance minister Patrick Chinamasa announced that the economy was expected to register a 3,2% growth this year. The estimate was informed by the tight liquidity, low domestic savings and investment inflows among other factors and remains below government’s projected average GDP growth in excess of 6% per annum between 2014 and 2018, under the Zanu PF economic blueprint ZimAsset.

The World Bank estimated Zimbabwe’s economy would grow by 3,2% in 2015. However, Econometer estimates Zimbabwe’s GDP will grow by a mere 1,2% due to political risk, coupled with growing non-performing loans, deflation, poor revenue performances and flat banking deposits.

Said Mugaga: “To government, agriculture contributes a disproportional weighting which is the reason for their unfounded GDP growth forecasts. For example, on its 3,2% growth forecast for 2015, agriculture alone contributed 2,6%.”

Econometer will this week publish its CPIX projection for 2015 as opposed to government’s CPI. CPI measures price flactuations of items in the monthly consumer basket, while Econometer’s CPIX excludes perishables, according to Mugaga.

“As per global standard, we look at the most proximious goods and services; we don’t include price changes of perishables due to their volatility,” Mugaga said, adding authorities use the South African government model.

“We do proper modelling and not just e-views (computer application for economic analysis) and our findings do not involve political intervention before release.”

He said government still uses an outdated excel model that was installed by the International Monetary Fund more than 10 years ago.

Zimbabwe Economics Society president Lovemore Kadenge also argues Zimbabwe’s research methods are questionable and in some cases inconsistent with regional and international standards.

He said for instance, state figures last year put the country’s unemployment rate in the region of 10,5% compared to independent estimates that are between 80% and 90%.

This discrepancy largely stems from variations on what defines employment.

“I think we need to relook at issues of definitions because you can’t say even a person selling sweets in the streets is employed,” Kadenge said. “It becomes a challenge when we don’t agree on figures and when you use different terms with your counterparts.”

Former economic planning minister Tapiwa Mashakada said although government uses the IMF international system on data collection, the country’s employment statistics were questionable.

There is need for a fresh and credible labour force survey that captures everything clearly including hidden unemployment and disguised unemployment, Mashakada said.

Mashakada also said while taking figures to cabinet ministers was bound to raise suspicion, it was just a procedure much in the same way a Finance minister is required to take the national budget to the president before delivering it in parliament.

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