The second in-person training session on greening macro-economic models, held as part of the Kenya Core Implementing Country (CIC) program and funded by the Global Program on Sustainability (GPS), brought together staff from the National Treasury, the State Department of Economic Planning, Kenya National Bureau of Statistics (KNBS), and Kenya Institute for Public Policy Research and Analysis (KIPPRA). The training focused on integrating natural capital and climate considerations into macroeconomic analyses and using climate and natural capital data compiled by KNBS for these purposes.
This trainings forms part of a broader Kenya CIC program objective to enhance capacity to develop and institutionalize natural capital accounting. This corresponds to a large part of the Kenya CIC program given the urgency to incorporate its uses (use-cases) to every-day policymaking decisions.
“The importance of natural capital and climate change have become profound for the Kenyan economy”, said Musa Kathanje, Director of Macro Fiscal Affairs Department, National Treasury, as part of his opening remarks at the training. Director Musa noted that having the ability to model the impact of climate and natural capital on the economy is critical for macroeconomic policy making and forms part of performance contracting, underscoring its relevance and importance. He informed the participants that the 2025 Budget Policy Statement captures an assessment and key discussions on how climate and natural capital are informing macroeconomic policymaking. He thanked the World Bank and the GPS for the ongoing technical support in this area.
In Nairobi, the five-day training transferred knowledge on how land and nature interact with the economy and how this can be brought to macroeconomic modelling; in particular, to the World Bank’s macro-fiscal model for Kenya (KenMOD). During the training, participants made simulations of macroeconomic and climate shocks. “The policy simulations and scenario analysis produced by the team showed how increasing global temperatures can have severe effects on economic growth and prosperity; heat stress, floods, and droughts can severely affect the health, consumption, and productivity of workers” shared Jorge Tudela, World Bank Economist for Kenya and co-TTL for the macroeconomic modelling component of the training. “It was great to see participants share their results between them and recognize how changing climate patterns have direct impacts on their hobbies and livelihoods.”
