did not see inflation coming and they did not understand it when it did. in emerging markets, we have taken some satisfaction in the verdict of many in the policy community4 that some of us did better here than the developed countries. but the big central banks are high - quality organisations and they demonstrate that quality, not by avoiding mistakes but by dealing with them and being honest about their errors. in the 1970s ‒ the last big global inflation surge ‒ central banks made many mistakes, gave many excuses and lost control of inflation. in the 2020s, i am confident we will do better, with far fewer excuses and much more success. 5 we are going to deliver on our mandates. of course, i am not a municipal manager. i doubt that my challenges, and the challenges of my profession, map directly to your challenges. that said, there is one area where our work overlaps, and that is the issue of inflation. at the sarb, our fundamental mission is to protect the buying power of the rand, and we specifically aim to protect it from increases in the cost of living, as measured by the consumer price index from stats sa. if you go to that index, you see some significant components where prices are set at the municipal level. think of water, think of rubbish collection, think of municipal rates. this discussion draws on amy edmondson. right kind of wrong : the science of failing well. 2023 an example is https : / / www. piie. com / publications / working - papers / central - banks - and - policy - communicationhow - emerging - markets - have https : / / www. federalreserve. gov / newsevents / speech / powell20220826a. htm unfortunately, these prices are often rising by more than headline inflation. in the latest inflation report from stats sa, for example, water inflation was 9. 6 %. housing assessment or municipal rates was 8. 4 %. these numbers should be much closer to the midpoint of the sarb ’ s target of 4. 5 %. high municipal inflation eats away the incomes of our people, keeps our inflation rate elevated, and makes it harder for us to lower interest rates. it ’ s ok for prices to keep up with inflation ; it ’ s not ok for some prices to always be rising by more than inflation. and we need you to take the lead to tackle this. let me conclude by summarising the main points i have made

an address by lesetja kganyago, governor of the south african reserve bank, at the inca capacity building fund ( icbf ) summer school, sandton, johannesburg, 5 february 2024 delivering on mandates good afternoon thank you for having me on this panel and thank you more broadly for the opportunity to engage with you on the topic of building state capacity at the municipal level. i recently returned from the world economic forum in davos, where people like me try to convince those looking for investment opportunities to choose south africa. davos is a very well - resourced town, and its local government runs smoothly, unlike most south african municipalities that are facing power outages, water shortages and long queues at municipal offices. at davos, we talk about the big issues facing the global community. local government does not feature much. but what happens at the local government level affects people ’ s lives just as much as the main davos themes, like artificial intelligence ( ai ) and climate change. furthermore, if we had a technology that improved local government capacity as drastically as ai has improved recently, i would say that would be a more important breakthrough than what we pondered at davos. of course, we do not have that technology. what we have is you, the officials who manage municipalities. today ’ s objective is to discuss mandates with you, and to share our knowledge and experience in trying to deliver on our mandates, in the hope that there are some common lessons. a mandate defines an organisation ’ s mission. in government, it is one of the ways in which a community achieves its goals. there are different ways, of course, to achieve social objectives. the classic mechanism in modern democracies is to choose people who then make choices on a community ’ s behalf, and if they do not like those choices, then they choose someone else the next time. but there are many decisions in democracies that are not directly made by voted - in representatives. rather, they are delegated to specialist organisations that have mandates. the south african reserve bank ( sarb ) is one of those organisations. this model works well when that mandate is clear and you know what is expected of you. it works best with goals that are generally agreed to be desirable, and for which we have the relevant and effective tools. it is also a particularly good way of insulating decision making from short - term political pressures, which can get in the way of good outcomes. 1 let me