Introducing Afghanistan’s First Economic Modeling Tool for Evidence-based Policymaking

February 28, 2021

© MoEc / 2021

UNDP Afghanistan trained key national stakeholders to use an important tool for evidence-based policymaking; the single-country Computable General Equilibrium (CGE) Model. The three-day training and capacity building course was attended by the Ministries of Finance, Economy, and National Statistics and Information Authority of Afghanistan and UNDP staff.

As part of its SDG Integration Programme, UNDP Afghanistan has developed the single-country CGE model for the Government of Afghanistan. The CGE model is fully developed, and its transfer to the Ministries of Finance, Economy, and the National Statistics and Information Authority of Afghanistan is already underway. Enabling government stakeholders to apply the model for economy-wide policy analysis and evidence-based cross-sectoral assessments, is the first step.

The training programme was launched by H.E. the Minister of Economy, Deputy Minister of Finance, Director of Accounts from the National Statistics and Information Authority and UNDP’s Resident Representative who spoke about the importance of the CGE model for evidence-based policymaking and analysis, particularly in the context of Afghanistan.

The participants expressed their gratitude for both the development of the important tool, and the provision of integral training for government employees. Karima Hamid Faryabi, Minister of Economy, said: “The CGE model was developed with the aim of simulating economy-wide elasticities and repercussions under different counter-factuals or “what-if” scenarios of investment planning, policy responses and programming in Afghanistan.”

“The model will run SDG simulations linked with the macro-economic variables of the model to provide insight into synergies and trade-offs between different policies and development outcomes and informs investment options on different development objectives of the country, including the SDGs” added the Minister.

Mr. Nazir Kabiri, the Deputy Minister for Policy in the Ministry of Finance emphasised the importance and need of CGE modeling for Afghanistan, notably in national policymaking. “CGE model will help the government in policy analysis and reaching our broader goal and we will use it in the implementation of ANPDF-II,” he said.

The CGE model enables the Government to recognize synergies among the SDG targets and formulate the right policies and make strategic choices given limited resources and considering our local contexts and governance arrangements.

The CGE model enables policymakers to prioritize, cluster, and sequence SDGs over the next decade and adopt the right policies in order to achieve goals. It will serve as a foundation for an SDG macroeconomic framework and policy coordination linking the MoEc, MoF, and other ministries, and will also serve as a policy-level platform to inform decisions in a data-constrained environment.

Abdallah Al Dardari, UNDP Afghanistan Resident Representative, expressed his gratitude to the modelling team, UNDP in Afghanistan and the Government of Afghanistan, for their hard work, contribution, and continued cooperation in developing this first version of the single-country CGE model.

The 36 participants from the Ministries of Finance, Economy, National Statistics and Information Authority of Afghanistan, and the UNDP will be trained over the next two days, and licensed General Algebraic Modeling System (GAMS) software, for up to 20 users, will be delivered to the ministries.