Most Member States do not compile high-frequency measures of gross domestic product (GDP). If they do, the estimates come with a considerable lag, yet policy decisions need to be made often, particularly when major shocks such as COVID-19 pandemic or climate related shocks have occurred.
This has inspired the COMESA Monetary Institute to come up with a training programme to build the capacity of staff in the regional apex banks to address this challenge. The first activity was a training program titled ‘Now casting and Near-Term Forecasting of GDP’ which was conducted recently in Nairobi, Kenya.
The objective was to engage central bank staff involved in policy analysis to appreciate nowcasting and acquaint them with the standard nowcasting methods and Near-Term Forecasting of GDP. It was attended by delegates from eight COMESA member Central Banks namely: Djibouti, Eswatini, Egypt, Kenya, Mauritius, Uganda, Zambia and Zimbabwe.
Now-casting simply means seeking to understand things (predict) the way they are happening now while Near-term forecasting is predicting what will happen in the Near future.
At the opening of the session, Dr Lucas Njoroge, Director of CMI observed that data publication delays and missing data complicates forward-looking policy making.
In such context, he noted, making use of a range of leading and coincident variables to forecast in real-time the missing values of GDP have become a standard practice in the analysis of economic outlook, in what is referred to as nowcasting. Its aim is to bridge the gap between the time lag in data releases and policymaking.
The training equipped the participants with scientific tools to overcome numerous data challenges faced by most COMESA member countries including but not limited to, missing data, lack of high frequency data, considerable data lags and publication delays.
The skills acquired at the training included various methods for now casting and near-term forecasting of GDP, which they will start applying to improve their forecasting methods. Participants also shared knowledge and experience of various aspects of forecasting.
“The ‘Now casting and Near-Term Forecasting of GDP’ is part of the CMI 2025 Work Plan, which was approved by the 28th meeting of the COMESA Committee of Governors of Central Banks in November 2024.