Africa faces capacity gaps in macroeconomic modeling – AfDB

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 out 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.

Guardian/Hauwa Abu