MEFMI Conducts Phase Three Technical Assistance Mission to Develop a Macroeconomic Model for Malawi

MEFMI is currently providing long-term technical assistance (TA) to the Ministry of Economic Planning and Development of Malawi to develop two (2) economic forecasting tools.  These tools are expected to be used as a basis for generating Malawi’s near-term Gross Domestic Product (GDP) projections and to inform policy design, briefs, and analysis, among others. The TA is organised into three (3) phases.

The first phase, which was conducted over the period 15 to 23 July 2019, involved structured training in GDP forecasting, from both the production and the expenditure approaches resulting in the development of the first versions of the two modelling tools. The first tool is based on Microsoft Excel and produces GDP forecasts through the value-added approach, by consistently linking all economic sectors.  The second tool is the Macro econometric model, which uses E-views software to forecast GDP from the expenditure side. The second phase, which was conducted from 11 to 19 November 2019, completed the modelling tools.

The third phase of the TA mission took place from 19 to 30 September 2022 and capacitated the participants on updating the models and creating additional scenario. The intervention strengthened the macroeconomic modelling and forecasting skills of the ministry staff to operate and use the models comprehensively. The mission also provided a refresher on macroeconomic modelling and forecasting, including the models themselves for the benefit of a large number of new staff that have joined the Ministry since the last mission in 2019. It went through the process of re-estimating the four (4) structural equations that underpin the EViews-based macro model i.e., private consumption, private investment, as well as export and import equations. It is expected that the models developed as well as the knowledge and skills gained from this mission will help support macroeconomic policy analysis at the Ministry of Economic Planning and Development in Malawi.

A total of 17 officials from the Ministry of Economic Planning and Development attended the workshop. Of the 17 participants, 8 (47%) were female while 9 (53%) were male. The workshop was facilitated by Dr. Patrick Ndzinisa from the Central Bank of Eswatini, Dr. Sayed Timuno from the Ministry of Finance of Botswana and Dr. Frank Chansa from MEFMI.

Prepared by Frank Chansa.