Strengthening Chadian institutional capacity in building and using CGE model
Project funded by the UNDP and Government of Chad
Following the participation of Chadian economists in a PEP School held in Dakar (Senegal – at the PEP African Office) in 2010, in which they trained in the use of techniques for “modelling and analyzing the micro impacts of macro policies and shocks”, the Ministry of Finance and Budget of the Republic of Chad requested the assistance of PEP in further strengthening its institutional capacity in the use of CGE modeling and simulation techniques.
In 2013, a team of PEP resource persons - world-leading experts in the field of economic modelling - were officially engaged to train and assist a team of selected local economists (from the Ministry) in building a CGE model of the Chadian national economy (reflecting its specific structures of this economy and national policy frameworks), while strengthening their capacity in the use of related techniques – from the collection of basic statistical data to the analysis of final simulations results.
Assistance and training were provided, by the PEP team of CGE experts, through both field visits - including six intensive training workshops - and ongoing distance support, through a “learning by doing approach” – during which were developed a series of increasingly sophisticated models. PEP resource persons are among some of the world’s most leading experts in the field of economic modeling. They have developed a series of standard CGE models that are acknowledged as some of the field’s most valued tools, especially for their application to the context of developing countries.
Find out more about these developments here: PEP standard CGE models
Funding for this initiative was provided by the United Nations Development Programme (UNDP) and the first phase was completed in December 2014. Given the great success and general appreciation of its outcomes by the Chadian and UNDP authorities, however, an extension (or second phase) has been requested. This new phase will include activities related to both the development and application of the tools and methods for policy analysis, over a period of 18 months.
A joint project initiative
- International team of PEP resource persons: Bernard Decaluwé (coordinator), André Martens, Véronique Robichaud, Helene Maisonnave and Lulit Mitik (senior economists) who provided training, materials and support.
- Local team of training modelers in Chad: eight quantitative economists, from the Ministry of Finance and Budget - Wanga Gomdigue, Augustin Nakoumbe Ndoumtara, Badi Ebe, Abbo Harpim, Hissein Mahamat Seid Djibrine, Saleh Idriss Goukouni, Fata Houssoube - working under the supervision of the Director of Planning and Studies, Mr. Abdoulaye Barh Bachar.
- Other supporter: Mr Masra Ngoibi, from the UNDP Country Office.
The main objective of the project is to build a CGE model of the Chadian economy, from the collection of basic statistical data to the analysis of final simulations results, while ensuring complete transfer of competences and analytical techniques to the local economists involved in the project - i.e. to build a team of local expert CGE modelers.
The initial project was carried out between March 2013 to December 2014, and is now completed. It comprises three distinct phases, including a total of six visits to N'Djamena, by the PEP resource team, to provide training and direct assistance in the related tasks - as described hereafter:
- Phase I - month 1 to 6
Updating the GAMS and modelling knowledge of the Chadian counterparts.
Identification of the relevant economic issues that will be analyzed with the CGE model (CGEM)
Designing the format of the social accounting matrix (SAM) that is best suited for the analysis of such issues and constructing the SAM.
- Phase II – month 6 to 12
Calibration of the first version of the CGEM, followed by a series of experimental simulations that may lead to modifications in the first model and the design of further rounds of simulations.
- Phase III – month 12-18
In-depth interpretation of the final simulations.
Defining a research agenda for the future.
Writing and submitting the final project report.
When not in Chad, the international team continue to provide distance support to the local team, especially in regards to the use of the related (GAMS) software tools, but also in the elaboration of the simulation scenarios and the interpretation of simulation results – to ensure proper capacity building.
Final outcome of the initial project
December 2014 - The latest (3.0) version of the Chadian CGE model, built in the context of this project, is a very detailed and sophisticated model that allows to capture various important characteristics of the Chadian economy. In particular, the model has been designed to take account of the following features:
- Importance of the informal sector and structural unemployment of informal workers
- Economy based on the exploitation of natural resources, and processing of certain oil products
- Policy of energy price control
- Wage and public spending policies, disaggregated in different areas (Public administration, Health and Education)
The expansion of the oil sector in recent years has, in particular, induced major changes in the country's economy, and Chadian officials are aware of the necessity to develop, internally, appropriate analytical tools/expertise in order to define the best policy options.
Given the great success and general appreciation of the initial project's outcomes, by the Chadian and UNDP authorities, an extension (or second phase) has been requested and is currently in discussion. This new phase will include activities related to both the development and application of the tools and methods for policy analysis, over a period of 18 months.
To find out more about other PEP collaborations around the world, visit: PEP special initiatives