Overview Zambia macro model project

During February 2008 till end of May 2009 the macroeconomic model and associated database has been built by training on the job by Micromacro Consultants (MMC) and MoFNP, furthermore MMC has assisted CSO by writing the Manual Re-basing National Accounts. This project was financed by World Bank.

During this project the annual macroeconomic model called “ZAMMOD” has been built, including a well-organised database (sheet SOURCE in the model).  ZAMMOD became operational in July/August 2008 and is already in use for analysis of the economy, forecasts for the Budget Speech, scenariobuilding like: ‘’How to realise MDGno1., reducing poverty by half in 2015” and ‘’Draft Baseline scenario for 6th NDP, and how to realise growth and decrease of poverty’’ and ‘’Exchange rate scenario’s”.

The project started end January 2008 with the construction of a demo macroabc model for Zambia by MMC. After the demonstration of that demo version in Zambia by MMC, decisions about the structure of the model could be taken in workshops. Then we deleted the demoversion, and during intensive workshops in Zambia the model was build from scratch completely through the hands of the participants.  During the workshops the consultants did not even touch the computer, they only guided the process by using a pointer. So the whole modelbuilding went through the hands of the “driver”, every workshop another participant.

Furthermore the consultants have co-operated with CSO staff to adsvise on re-basing the National Accounts, resulting in a new Annual Business Survey, and a file that was used for re-basing of the National Accounts, starting with 2006. 

During this project Monthly reports have been produced and 12 Papers, each paper with attached a CDROM with all data, text and model files. Furthermore Paper 13 with Handbook ZAMMOD (459 pages and CDROM with all files) has been made in May 2009.

Several milestones have been realised: 1) the inception report in March 2008, 2) the test version of the model end of April 2008, 3) the operational version of the model including Manual in August 2008, 4) the Manual Rebasing in November 2008, 5) the training in the use of the model was finalised during the April 2009 visit and the production of the Handbook ZAMMOD in May 2009.

In this project the construction of the model and the associated database went hand in hand. This contributed to a better understanding of the data and not only economists of MoFNP, but officials of CSO have been trained in the consistency framework (the consistent data part of the model consisting of National Accounts expanded with labour market, detailed government, monetary sector, Balance of Payments, etc.). Because of this training, CSO will be able to contribute to update of the data part of the model regularly, which in turn will contribute to the analytical capacity and the sustainability of the model.  During the workshops in Zambia around 10 of the average number of 20 participants were CSO staff members.

Furthermore, a poverty module has been built, based on figures from Living Conditions Monitor Survey 2006 and 1996. This poverty module is called MicromacroSim. That combines detailed information concerning the numbers and income distribution to socio-economic group to the macro model. By the combination of ZAMMOD and the poverty module one can calculate the effects of macroeconomic policies on change of numbers below the poverty line.

The training of the whole data and model construction are hands-on by the participants. This was achieved by ensuring that during the visits of MMC to MoFNP and from MoFNP to MMC almost every morning in a plenary workshop from 9.00-12.00 an MMC consultant gave face to face training on the job in a workshop in which the officials and the consultant sit around a computer.  In the afternoons 14.00-16.00 individual work and bilateral discussions between MMC consultants and Zambian specialists did take place. During the workshops, not the consultant but a “driver” handles the keyboard and the mouse and the consultant only giving guidance with his pointer. From the beginning this guaranteed that all components brought into the model are understood by the Zambian officials.

During the 16 month of this project, almost every period of two month  on average two MMC experts did visit MoFNP in Lusaka during two weeks, except during the months that Zambian experts visited MMC in the Netherlands, and excluding March and April 2008, because in those months each month MMC experts have been three weeks in Lusaka.

During the three training visits to MMC’s office in the Netherlands the Zambian participants got every morning a workshop by another MMC specialist in the theoretical backgrounds as well as the practical use of a macro model and National Accounting (including best practice Curaçao). In two weeks they shared in the knowledge of  ten specialists, and this resulted in a proceedings report to be studied by the modelling team members not included in this visit. After the products (annual model, quarterly version of it, poverty module and re-basing manual) had been delivered, MMC continued to provide training on the job in the use of them. And, at the end of the project an advice for further activities and training is given. Furthermore a Study module was made and this will help also the “new generation”, new Zambian officials entering the modelling work after the completion of this project.

The work was organised in:
1) training on the job during 8 visits in Lusaka in the construction of models and database (and after that training in the use of it). In total 66 days with workshops, in total 1295 participant days, on average 19,6 participants per workshop. In total 120 participants did join one or more workshops.
2) three training visits of each time four participants to the Netherlands (ten experts every in a different workshop every day), and
3) contacts with the team leader by telework when he is not in Lusaka, and preparation of the visits and construction of training materials by telework by the team leader and his assistant.

Pictures of the Zambia project

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