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Impact of COVID-19: Nowcasting and Big Data to Track Economic Activity in Sub-Saharan Africa

Author

Listed:
  • Brandon Buell
  • Reda Cherif
  • Carissa Chen
  • Karl Walentin
  • Jiawen Tang
  • Nils Wendt

Abstract

The COVID-19 pandemic underscores the critical need for detailed, timely information on its evolving economic impacts, particularly for Sub-Saharan Africa (SSA) where data availability and lack of generalizable nowcasting methodologies limit efforts for coordinated policy responses. This paper presents a suite of high frequency and granular country-level indicator tools that can be used to nowcast GDP and track changes in economic activity for countries in SSA. We make two main contributions: (1) demonstration of the predictive power of alternative data variables such as Google search trends and mobile payments, and (2) implementation of two types of modelling methodologies, machine learning and parametric factor models, that have flexibility to incorporate mixed-frequency data variables. We present nowcast results for 2019Q4 and 2020Q1 GDP for Kenya, Nigeria, South Africa, Uganda, and Ghana, and argue that our factor model methodology can be generalized to nowcast and forecast GDP for other SSA countries with limited data availability and shorter timeframes.

Suggested Citation

  • Brandon Buell & Reda Cherif & Carissa Chen & Karl Walentin & Jiawen Tang & Nils Wendt, 2021. "Impact of COVID-19: Nowcasting and Big Data to Track Economic Activity in Sub-Saharan Africa," IMF Working Papers 2021/124, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2021/124
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    Citations

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    Cited by:

    1. Giovanni Ballarin & Petros Dellaportas & Lyudmila Grigoryeva & Marcel Hirt & Sophie van Huellen & Juan-Pablo Ortega, 2022. "Reservoir Computing for Macroeconomic Forecasting with Mixed Frequency Data," Papers 2211.00363, arXiv.org, revised Jan 2024.
    2. Daniel Hopp, 2022. "Performance of long short-term memory artificial neural networks in nowcasting during the COVID-19 crisis," Papers 2203.11872, arXiv.org.
    3. Emilio Blanco & Fiorella Dogliolo & Lorena Garegnani, 2022. "Nowcasting during the Pandemic: Lessons from Argentina," BCRA Working Paper Series 202299, Central Bank of Argentina, Economic Research Department.

    More about this item

    Keywords

    model prediction; quantile plot; ML model; GDP YoY; data variable; YoY percent change; Factor models; Machine learning; Time series analysis; Spot exchange rates; Mobile banking; Africa; Sub-Saharan Africa;
    All these keywords.

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