South Africa's statistics agency faces funding crisis

South Africa's statistics agency is facing a funding crisis that might affect the quality of official data if not addressed, the organization which oversees the agency said on Tuesday. David Everatt, chairman of the Statistics Council, said the agency needed 200 million rands ($13.3 million) in funding to work efficiently.

Statistics South Africa (Stats SA) is the source of official data in Africa's most industrialized economy, including gross domestic product (GDP), consumer price inflation, mining and manufacturing output. Everatt said the agency was being forced to consider cost cuts because of the hole in its budget and faced staff shortages due to a hiring freeze imposed by the government in 2015.

"Sample sizes are being cut, which over time will lead to wider error ranges. Activities are having to be ranked, and some simply dropped," Everatt said in a statement issued on behalf of the Statistics Council. "Stats SA right now is at a tipping point. The warning lights are flashing red, and the government needs to act swiftly if South Africa were to retain a robust and innovative Stats SA," Everatt said.

South Africa's public finances are strained amid sluggish economic growth and bailouts for ailing state companies such as power utility Eskom and South African Airways. "If Stats SA is not able to fill posts with skilled people, keep sample sizes up, and innovate, the Council will be forced to withdraw support for official statistics," Everatt said.

"Council either endorses the release of data everyone can trust, or Council stops because we cannot endorse data we mistrust."