Nigeria and African countries face significant capacity gaps in macroeconomic modeling, despite the huge strides they have made in terms of forecasting, analysis and effective policy management, a new African Development Bank (AfDB) Group study has said.
The report, Benchmark Macroeconomic Models for Effective Policy Management in Africa, was launched in the Ethiopian capital Addis Ababa by the bank’s African Development Institute on the sidelines of the African Economic Conference 2023.
The study surveyed 31 of 54 African countries. To undertake the research, the bank partnered with the Central Banks and Ministries of Finance and Planning, with support from the Nairobi-based African Economic Research Consortium.
The bank’s Chief Economist and Vice President for Economic Governance and Knowledge Management, Prof. Kevin Chika Urama, said the report provides an inventory of models and modelling capacity in African countries and examines their relevance to development realities as the continent faces recurrent challenges. He stressed the importance of macroeconomic models as tools for countries to effectively understand and predict the behaviour of their economies.
“But models are only attempts to simplify realities logically to inform decision-making under specific assumptions, contexts and realities,” Urama said.
“Models are therefore as relevant as the extent to which they approximate realities and can inform appropriate decision-making in specific contexts,” he added.
Speaking at the launch, Shalom Gebredingel, Chief of Staff and Special Advisor to Ethiopia’s Minister for Planning and Development, said the report was more than a collection of data.
“It represents a shared commitment to transformative change. It is a call to action, urging us to rethink our approach, question assumptions and embrace innovation in our policy endeavors,” she said.
Africa has grappled with formidable challenges, including the COVID-19 pandemic, Russia’s invasion of Ukraine, as well as climate change and its impacts in the form of droughts and flooding, Gebredingel said.
Such challenges highlight “the crucial emphasis for policymakers to comprehend as well as skillfully navigate the intricate interplay of global, regional and local dynamics of our economies,” she said.
The African Development Institute’s Division Manager for the Policy Management Division, Dr Eric Ogunleye, presented the findings of the study.
Its main objectives were to undertake a stocktaking of the types of models that are available in African countries, and assess how operational and fit for purpose they are, Ogunleye said.
The Africa Development Bank Group, he explained, is keen to ensure that its capacity development initiatives in member countries are demand-driven and based on their specific realities and contexts.
“Before we think about defining any macroeconomic management capacity development initiative to support our regional member countries, we deem it fit to have first-hand understanding of the issues and capacity gaps on the ground and that was the motivation for this study,” he said.
Report identifies capacity gaps in African macroeconomic modelling
Nigeria and African countries face significant capacity gaps in macroeconomic modeling, despite the huge strides they have made in terms of forecasting, analysis and effective policy management, a new African Development Bank (AfDB) Group study has said.
The report, Benchmark Macroeconomic Models for Effective Policy Management in Africa, was launched in the Ethiopian capital Addis Ababa by the bank’s African Development Institute on the sidelines of the African Economic Conference 2023.
The study surveyed 31 of 54 African countries. To undertake the research, the bank partnered with the Central Banks and Ministries of Finance and Planning, with support from the Nairobi-based African Economic Research Consortium.
The bank’s Chief Economist and Vice President for Economic Governance and Knowledge Management,
Prof. Kevin Chika Urama, said the report provides an inventory of models and modelling capacity in African countries and examines their relevance to development realities as the continent faces recurrent challenges. He stressed the importance of macroeconomic models as tools for countries to effectively understand and predict the behaviour of their economies.
“But models are only attempts to simplify realities logically to inform decision-making under specific assumptions, contexts and realities,” Urama said.
“Models are therefore as relevant as the extent to which they approximate realities and can inform appropriate decision-making in specific contexts,” he added.
Speaking at the launch, Shalom Gebredingel, Chief of Staff and Special Advisor to Ethiopia’s Minister for Planning and Development, said the report was more than a collection of data.
“It represents a shared commitment to transformative change. It is a call to action, urging us to rethink our approach, question assumptions and embrace innovation in our policy endeavors,” she said.
Africa has grappled with formidable challenges, including the COVID-19 pandemic, Russia’s invasion of Ukraine, as well as climate change and its impacts in the form of droughts and flooding, Gebredingel said.
Such challenges highlight “the crucial emphasis for policymakers to comprehend as well as skillfully navigate the intricate interplay of global, regional and local dynamics of our economies,” she said.
The African Development Institute’s Division Manager for the Policy Management Division, Dr Eric Ogunleye, presented the findings of the study. Its main objectives were to undertake a stocktaking of the types of models that are available in African countries, and assess how operational and fit for purpose they are, Ogunleye said.
The Africa Development Bank Group, he explained, is keen to ensure that its capacity development initiatives in member countries are demand-driven and based on their specific realities and contexts.
“Before we think about defining any macroeconomic management capacity development initiative to support our regional member countries, we deem it fit to have first-hand understanding of the issues and capacity gaps on the ground and that was the motivation for this study,” he said.
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