Dr. Félicien USENGUMUKIZA Senior Lecturer at National University of Rwanda UNITED NATIONS ECONOMIC...
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Transcript of Dr. Félicien USENGUMUKIZA Senior Lecturer at National University of Rwanda UNITED NATIONS ECONOMIC...
Dr. Félicien USENGUMUKIZA
Senior Lecturer at National University of Rwanda
UNITED NATIONSECONOMIC COMMISSION FOR AFRICASub regional Office for Eastern Africa (SRO – EA)
Kigali, March 13TH 2010
Overview of Macroeconomic models and Forecasting
Objective of the study
Methodology
Justification of Modelling and Forecasting Methods in EAC Central
Banks
Challenges and Gaps related to Modelling and Forecasting use in
EAC Central Banks
Conclusion
Recommendations
OVERVIEW OF MACROECONOMIC MODELS AND FORECASTING
Macroeconomic model is a basic tool of analysis used to describe, to
explain and to understand macroeconomic phenomenon.
A model serves as like a laboratory of
experimentation or for testing hypothesis
Making assumptions regarding behaviour of
macro variables,
Specifying equations expressing the
relationship between the selected macroeconomic
variables
Specifying and defining variables used in the
model,
Specifying criteria for drawing conclusions
Expressing economic identities if required
Economic forecasts predict the course of the aggregate economy and
concentrate on variables such as GDP analysis, interest rates, the rate of
inflation, and the rate of unemployment. Forecasts of private consumption
and investment, government expenditures, and net exports help government
policymakers responsible for fiscal policy.
QUANTITATIVE METHODS
QUALITATIVEMETHODS
FORECASTING METHODS
CAUSAL FORECASTING
METHODS
TIME SERIESMETHODS
JUDGEMENTALMETHODS
use historical data as the basis
of estimating future outcomes
use the assumption that it is possible to
identify the underlying factors
that might influence the variable that is
being forecast
incorporate intuitive judgements, opinions
and subjective probability estimates
MODELLING & FORECASTING METHODS IN EAC CENTRAL BANKS
To undertake a stocktaking of the competency gaps in Economic Modelling
and Forecasting in the five central banks;
To define the areas where the overall level of the region stands behind;
To define needs of a training capacity building program and the recipient
candidates;
To formulate recommendations on training modules and general content.
The field work has been identified as the best approach. It is in this context
that the tour in the five EAC central banks was carried out within two
weeks. It has been identified that Research Department in each central
bank would be the best source of information related to the needs in terms
of training in Modelling and Forecasting Program.
To develop adequate skilled capacity in analytical capability of EAC Central Banks to
effectively manage the monetary policies and monitor the performance of the Economies
in the Region,
To enhance the capacity in management of reserves money and liquidity forecasting,
To understand how financial markets work and impact on monetary policy;
To undertake surveys on inflation expectations;
To understand interaction between monetary policy and real sector, and liquidity
forecasting ,
To eliminate liquidity phobia associated with commercial banks borrowing from central
bank.
Bank of Tanzania
National Bank of Rwanda
(BNR)
Bank of Uganda
Central Bank of Kenya
(CBK)
Banque de la République du Burundi (BRB)
Research Department
Directorate of Research
Large Macro econometric Modelling
Section Research Department
Senior Directorate (Monetary Policy
and Research, Financial Stability)
Modelling & Forecasting
Division
Monetary & Financial Market
Department
Directorate of Research
STUDY ON MODELLING AND FORECASTING IS A TASK OF RESEARCH DEPARTMENT IN EAC CENTRAL BANKS
Some Central banks are not using the econometric approach in modelling and
forecasting analysis
All EAC central Banks witness a gap in terms of high qualified staff equipped with
econometric background
Use of adequate software related to modelling and forecasting is almost inexistent
Lack of harmonisation in terms of forecasting techniques. This leads to the
diversification in terms of interpreting the results from respective central banks
• Scarcity of sound forecasting frameworks weakens budgeting and planning processes
in the continent;
• EAC Central Banks remain far behind in building full-fledged macroeconomic models
and in providing accelerated training for qualified modellers and forecasters ;
• Macroeconomic forecasting in EAC Central Banks has been highly dependent on
models developed in others central banks in the world, which were not true
representation of local realities;
Modelling and Forecasting Program is designed to provide anyone who needs to make
financial decisions,
The reality found in EAC central Banks confirms that the training in Modelling and
Forecasting is for great necessity,
The heads of research department in respective EAC Central banks are welcoming the
initiative proposed by UNECA of providing such kind of training,
As the EAC is deepening and widening its regional integration, the harmonisation of
macroeconomic and financial analysis will facilitate to eliminate gaps observed in
interpretation of national and regional economy.
EAC central Banks needs training in modelling and forecasting in order to facilitate the
harmonisation of macro economic and financial analysis with the community.
due to existing gaps between different central banks, it would be necessary to organise
internal training related to specific needs and gaps of each individual central bank.
The share of experience among staff of central banks would accelerate the harmonisation
of financial analysis
Due to the project establishing the EAC central bank, some activities would be executed
jointly with the five central banks.
The EAC needs to establish its own model related to its reality rather than continuing
using models applied in advanced economies.
N˚ Country Institution Name of contacted Person
Position Address Phone number E-mail
1. RwandaNational Bank of Rwanda (BNR)
Dr. Kigabo Rusuhuzwa Thomas
Chief EconomistP.O Box 531
Kigali -Rwanda+250 788303633 [email protected]
2. BurundiBanque de la
République du Burundi (BRB)
Mr. Sota BonaventureDirecteur Responsable du service des Etudes
P.O Box 705 Bujumbura -
Burundi
+257 79910367 [email protected]
Mr. Audace NiyonzimaDeputy Director Monetary & Financial Market Department
+257 79970126 [email protected]
Mr. Joseph BahiziHead of Monetary & Financial Market Department
+257 77733230 [email protected]
3. Uganda Bank of Uganda
Dr. Adam MugumeAssistant Director Head, Modelling & Forecasting Division P.O Box 7120
Kampala - Uganda
+256 772416058 [email protected]
Mr. Francis Leni AnguyoHead, Large Macroeconometric Modelling Section Research Department
+256 774224565 [email protected]
4. Tanzania Bank of TanzaniaDr. Kamili Alphonce
KombeDeputy Director, Research
P.O Box 2939 Dar es Salaam
5. KenyaCentral Bank of Kenya (CBK)
Mr. Charles G. Koori Director of Research DepartmentP.O Box 60000-00200 Nairobi -
Kenya
+254 722235583 [email protected]
Mr. Lukas Njoroge Research Department +254 720459004 [email protected]