StatsSA boss slams UN invoice-fraud report | Fin24

StatsSA boss slams UN invoice-fraud report

Jul 28 2016 15:42
Liesl Peyper

Cape Town - Statistician-general Pali Lehohla disputed the accuracy of a United Nations report on invoice fraud, which states that there had been gross discrepancies in South Africa’s records of gold exports and that of its trading partners.

The United Nations Conference on Trade and Development (Unctad) recently released the report at a global commodities forum in Nairobi in Kenya. The authors of the report suggested that South Africa’s gold sector needed to be scrutinised, as “virtually all the gold” that was exported from South Africa left the country “unreported”.

READ: Invoice fraud rife in SA gold exports - UN report

At a media briefing of Statistics South Africa on Thursday, Lehohla took issue with the report, calling its release “irresponsible”. He added his voice of concern to that of the Chamber of Mines, which had issued a media release earlier on the matter.

In its release the Chamber of Mines said it disputed the “veracity of the data, the assumptions on which the research is based and the conclusions drawn as a result”. 

Lehohla emphasised that he was not suggesting that misinvoicing didn’t exist, but he would have thought the United Nations (UN) would have consulted with South Africa first before releasing such a report. “The UN is, like the IMF (International Monetary Fund) an organisation that needs to consult a country before a report such as the Unctad one is released,” Lehohla said.

Under-invoicing and over-invoicing are complex areas, he added. The export statistics in one particular country and the imports in the destination country are often difficult to reconcile.

“Imports can be accounted for on a one to one relationship with commodities, but in terms of transactions there can be more than one relationship. An importer can easily before the merchandise lands in his or her country redirect it to another country.

“The mirror accounts can be reflected as two units. Given this complexity, I’d expect deeper analysis before reports such as this one is released,” Lehohla said.

He pointed out that a study led by former president Thabo Mbeki was undertaken on illicit financial flows. From the research it emerged that $50bn leave the African continent illegally on an annual basis due to transfer pricing and under-pricing.

“This narrative (Unctad report) was published in the context of the Mbeki study,” Lehohla said. “But Unctad hasn’t done a thorough job.”

Lehohla added that the environment in South Africa is such that rating agencies could downgrade South Africa’s investment status to junk.

“I’m agnostic about whether we’d reach junk status. But whatever that rating is – it has to be driven by a proper evaluation and the Unctad report is not (a proper evaluation)."

statssa  |  pali lehohla  |  gold  |  trade


Company Snapshot


Debt and Eskom will take centre stage at this year's Budget

Voting Booth

How concerned are you about ransomware attacks?

Previous results · Suggest a vote