Economy shifting far too rapidly for Stats SA
February 26, 2009
By Peter de Ionno
The world has changed dramatically since Statistics SA surveyed local income and expenditure patterns in 2005 and 2006. In January 2006, the rand exchange rate was threatening to break through R6 to the US dollar, which meant each rand could buy at least $0.16 compared with $0.10 currently.
The Reserve Bank's repo rate was seven percent, which meant benchmark prime and mortgage rates were 10.5 percent compared with 14 percent now. And the price of 95 octane petrol at the pump was R5.49 a litre compared with R6.62 now.
All this means there was once a lot more disposable income in the economy and householders were living high on the hog, funded by inexpensive credit. They were buying houses and cars and other big-ticket items with abandon.
But those days are long gone. Even with lower interest rates, it will take consumers a long time to reduce their debt burdens to manageable levels. Spending on durable goods has fallen from about 9.5 percent of total household consumption in the first quarter of 2006 to less than 8 percent in the third quarter of 2008.
And sharp falls in motor vehicle sales in the fourth quarter show the percentage was probably still declining.
Why this is relevant is that the weightings in the new consumer basket introduced last month by Statistics SA were based on consumption patterns that have changed considerably and could change more as the world slips into recession.
Statistics SA is, of course, not to blame for the anomaly - except that it conducts surveys too infrequently, presumably due to a shortage of funding.
But it will be at least five years before a new basket is introduced, if previous experience is anything to go by. So inflation figures will be based on a basket of goods that is no longer appropriate.
Late for the party
Politicians will do anything for free publicity so it's a bit difficult to understand how Gwede Mantashe, the secretary-general of the ruling ANC, shunned such an occasion on Tuesday, when Barloworld and the Wits Business School gave leaders or representatives of the major political parties an opportunity to shine on the hustings in a public panel discussion on their parties' manifestos on transformation.
Mantashe was said to have got lost by going to the University of the Witwatersrand in Johannesburg's central business district instead of the Barloworld complex in Sandton, where the function was held.
"That's typical of Mantashe," roared Bantu Holomisa, the leader of the United Democratic Movement (UDM).
While it was later reported that Mantashe was on his way to the right venue, he never actually pitched up.
Narend Singh, representing the Inkatha Freedom Front, and Holomisa wasted no time jokingly soliciting cash donations from Barloworld, "preferably in suitcases".
Isaac Shongwe, a Barloworld executive director, politely refrained from telling them that his company was facing its own financial pinch, brought about mainly by the empowerment deal that was widely trumpeted in 2008.
Holomisa won the accolades of the day by coming up with the only original proposal in the debate. The UDM wanted a national economic indaba involving all stakeholders to be convened after the election, to discuss transformation.
At question time, one of Holomisa's imbongis warned the Congress of the People (Cope) not to steal Holomisa's idea.
The second prize goes to Lawrence Khoza, Gauteng's Cope convenor, who told an ANC sympathiser: "Every minor failure is blamed on the Cope leaders. The ANC gets credit for every success."
Building on morality
The planned crackdown on bribery and corruption in the construction sector by Consulting Engineers South Africa (Cesa) is an important commitment. Although Cesa has not expelled any member in the past five years for either bribery or corruption, the crackdown must been seen in a much wider context.
Cesa president Felix Fongoqa said consulting engineers operated within the general construction industry, where Cesa had heard reports indicating that dishonesty might be a problem.
He said Cesa had encouraged members to adopt the business integrity management system of the International Federation of Consulting Engineers (Fidic). It would also like to see public sector clients adopt Fidic's government procurement integrity management system.
It will also be lobbying the government to underwrite this system as a national policy with respect to the procurement of infrastructure. In light of the planned expenditure of about R780 billion over the next three years on public infrastructure, the temptation for underhand dealings could not be greater.
Fongoqa said Cesa had adopted a zero tolerance approach to corruption and had warned that it would expel any members found guilty of bribery, extortion, fraud, misrepresentation, collusion, trading influence or conflict of interest, "be they through family or other ties". It would also "name and shame" them.
Based on history, it appears unlikely there will be many Cesa members who will be named and shamed - but that does not mean Cesa's crackdown is merely hot air.
Its members are in a unique position to spot bribery and corruption in the construction sector. According to Fongoqa's assessment of the general level of high integrity in their sector, these members have an opportunity to report any suspicions they may have of underhanded dealings, by becoming whistle-blowers.
At a time when the morality of the country's leaders in many fields is being questioned, as professionals of high integrity, Cesa members owe it to the country to do the right thing - and not look the other way and remain silent.
Edited by Peter DeIonno. With contributions by Ethel Hazelhurst, Wiseman Khuzwayo and Roy Cokayne
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