Following the successful launch of the Institute’s first edition of the Macroeconomic Modeling and Forecasting Manual in 2013, a MEFMI Programme Officer, in the Macroeconomic Management Programme, Mr Jean Baptiste Havugimana, participated in a capacity building activity that focused on Practical General Equilibrium Modeling with the General Algebraic Modeling System (GAMS) software. The goal for the institute was to ensure there is capacity at MEFMI to assist member states which have on-going project or planning  to undertake one in the future in this modelling area. Swaziland technicians will be the first to benefit from the skills and knowledge gained from the course.  Mr Havugimana will be part of the team which will conduct an in-country workshop on modelling and forecasting using the MEFMI Macroeconomic Model during the course of the year. The in-country mission will also facilitate the upgrading and re-calibration process of the current system.

The course which was organised by the EcoMod School of Modeling in Washington DC was held from the 3rd to the 7th of March 2014. GAMS is a high-level modeling system for mathematical programming and optimization. GAMS is tailored for complex, large-scale modeling applications, and allow users to build large maintainable models that can be adapted quickly to new situations.

The objective of the course was to introduce all the basic tools for constructing and implementing large-scale applied general equilibrium models for policy analysis and to estimate the models using GAMS software. Topics covered in the course included:

• The structure of open economy general equilibrium models;
• Building the database for such models;
• Building social accounting matrices;
• Calibrating a CGE model;
• Formulating a CGE model as a non-linear programming problem;
• Formulating a CGE model as a mixed complementarity problem;
• Implementing the model on the computer using the GAMS software;
• Modeling the labor market;
• Formulating scenarios and running policy simulations;
• Reporting and interpreting the results; and
• Linking GAMS and Excel for reading and reporting data.

The course delivery combined presentations and practical applications of the presentations. In addition, it focused on individual class exercises and case studies were administered. It was also a requirement that participants prepare and present an individual case study that was assessed to check level of understanding. The individual case studies enabled participants to gain insight into CGE modeling and how to use CGE results to carry out forecasts. Participants were given the Licence for a 90-day trial version of GAMS.

In relation to the MEFMI Macroeconomic Modeling and Forecasting Manual, which is a reference document that provides a set of standard, sectoral and disaggregated modeling frameworks that can be applied in developing small macroeconomic and other small sectoral models, the course capacitated the Programme Officer to provide support to the manual users without necessarily calling on international experts. The Manual is a practical reference document which is useful in the modeling and forecasting functions in central banks, ministries of finance/planning and bureaus of statistics. 

The GAMS course was attended by 13 delegates mainly from Ministries of Finance and economic development, ministries of trade and regional integration, environment and health, regional development banks, International non – governmental organisations (NGOs). Two MEFMI countries, Mozambique and Namibia sent delegates to the course. Some African institutions were also represented. These included the African Union and the African Development Bank. Other delegates were from Asia (Vietnam, Cambodia, Laos and Taiwan), Latin America (Perou and Bolivia), Europe (Norway) and Eastern Europe (Kazakhstan).