African countries still face significant capacity gaps in macroeconomic modelling, despite the enormous progress they have made in forecasting, research and effective policy management, according to a new study by the African Development Bank (www. AfDB. org Group.
The report, titled Macroeconomic Benchmarks for Effective Policy Management in Africa, was launched in Addis Ababa, the capital of Ethiopia, through the Bank Group’s African Development Institute on November 18, on the sidelines of the 2023 African Economic Conference.
The study covered 31 out of 54 African countries. To adopt this research, the Bank Group partnered with central banks and the ministries of finance and planning, along with the Nairobi-founded African Economic Research Consortium.
Professor Kevin Chika Urama, Chief Economist and Vice President of the Bank for Economic Governance and Knowledge Management, said the report takes stock of modelling patterns and functions in African countries and examines their relevance to realities as the continent faces recurring challenges.
He highlighted the importance of macroeconomic models as tools for countries to perceive and expect the functionality of their economies well.
“But models are just attempts to simplify realities into logical tactics to explain decision-making in assumptions, contexts, and expressed realities,” Urama said. “Models are only applicable to the extent that they are close to the truth and can say the right things. “decision-making in express contexts. “
Speaking at the launch, Shalom Gebredingel, Chief of Staff and Special Advisor to Ethiopia’s Minister of Planning and Development, said the report is more than just data collection.
“This represents a shared commitment to transformative change. This is a call to action that pushes us to reconsider our approach, challenge assumptions, and embrace innovation in our policy efforts,” he said.
Africa is grappling with difficult challenges, such as the COVID-19 pandemic, Russia’s invasion of Ukraine and climate change and its effects in the form of droughts and floods, Gebredingel said.
Such demanding situations highlight “the critical importance for policymakers to skillfully navigate the complex interplay of the global, regional and local dynamics of our economies,” he said.
Dr. Eric Ogunleye, Head of the Policy Management Division at the African Development Institute, found out what the study concluded.
Its main objectives were to adopt a set of the types of models available in African countries and assess the extent to which they are operational and compatible for their purpose, Ogunleye said.
The African Development Bank Group, he explained, is willing to make its capacity building projects in member countries demand-driven and grounded in their specific realities and contexts.
“Before thinking about defining a macroeconomic control capacity improvement initiative to help our regional member countries, it is useful to have a first-hand understanding of the problems and capacity gaps on the ground and that is what motivated this study,” he said.
The Economic Conference for Africa was held from 16 to 18 November 2023 in Addis Ababa under the theme “Imperatives for Sustainable Industrial Development in Africa”.
Organized through the African Development Bank, the United Nations Economic Commission for Africa and the United Nations Development Programme, the 18th edition of the convention brought together experts, the public sector, researchers and youth to discuss the demanding situations and industrialization clients. in Africa. .
Media Contact: Olufemi Terry African Development Bank Group media@afdb. org
About the African Development Bank Group: The African Development Bank (AfDB) Group is Africa’s leading progressive financial institution. It contains 3 separate entities: the African Development Bank (AfDB), the African Development Fund (ADF), and the Nigerian Trust Fund (NTF). ). With a presence in 34 African countries and an external workplace in Japan, the AfDB contributes to the economic and social progress of its 54 regional member states. For more information: www. AfDB. org
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