upper end of the inflation target range. yet at the same time, a slowdown in economic growth – at least in the event that it is demand - driven and results in a negative output gap – means that the central bank has to be mindful not to exacerbate the cyclical moderation by unduly tightening monetary policy. procyclical monetary tightening can negatively impact on economic growth and employment, and over time could contribute to financial instability. it is worth noting that the nature of the inflation pressures faced by african central banks may itself be changing. a recent imf study showed that while, in the past, inflation cycles tended to be heavily influenced by domestic supply shocks, the role of foreign exchange, money supply and domestic demand shifts has gradually increased over time. 4 it is therefore likely that demand shocks ( global, regional and local ) matter increasingly more for inflation rather than supply - related ones. ever - increasing trade and financial integration has been beneficial to growth and development in sub - saharan africa over the past decade or two ; it has also brought greater dependency on and responsiveness to international economic and financial see ‘ on the drivers of inflation in sub - saharan africa ’ by anh d. m. nguyen, jemma dridi, filiz d. unsal and oral h. williams, monetary fund working paper series wp / 15 / 189, august 2015. bis central bankers ’ speeches trends, and with it also the need for greater cooperation and exchange of information among african countries, including their central banks. so how should central banks in africa respond to these new challenges? first of all, there is no “ one size fits all ” policy response. because of the structural differences between african countries – such as their oil exporter / importer status, the diversification of their production, the degree of development of their respective financial sectors, and the health of their public finances – they are not equally vulnerable to the current global challenges. as mentioned earlier, the outlook for both growth and inflation in the region ’ s member states shows significant divergences. the imf, for example, forecasts that inflation in several countries – mostly members of the cfa zones but also some oil importers, like kenya – is expected to remain muted, or even to decline, in 2016. several other countries, however, including many of the largest economies of the continent, are likely to see inflation drifting higher or remaining around uncomfortably elevated levels. nonetheless, common themes may be emerging

. accessing data is perhaps the easy part. the first hurdle is deciding how the outlook for domestic and global economy impacts on future inflation. to clear this hurdle requires the team to interpret current economic conditions and events, and to apply judgement about the likely future path of the economy. there are many factors that the team must consider, and they are often moving in different directions, making judgment on how they will affect future inflation that much more difficult. at the end of it all, committees rely on judgement in making the call whether to cut, increase, or keep interest rates unchanged. monetary policy decisions in the sarb are made by the monetary policy committee ( mpc ). the mpc currently comprises six members, being the governor, the three deputy governors, and two other senior officials of the sarb. every decision of the mpc is an outcome of in - depth discussion and debate. even a'no change'decision is a policy decision. i should also note that the monetary policy decision is not a one - off event ; it is a continuous process which culminates in the mpc meeting where decisions are finally taken. we are constantly talking to each other, discussing what we see and how we interpret what we see. there is a sizeable literature on the relative efficiency of committee - based decision making. a committee tends to pool information and ideas from a group comprising different skills and views, and it also provides insurance against extreme preferences and outcomes. so, there is an additional benefit that participation in the mpc schools challenge potentially offers learners. and that is that those learners get an opportunity to develop or put their social skills into practice. by social skills i mean the ability to interact with fellow human beings. literature shows that the ability to interact with fellow workers, successfully working as a team remains among the most important skills in the modern economy. this is because technology has yet to successfully simulate human interaction. the ability to listen to the views of your colleagues, question or debate the issues they raise and attempt to persuade them otherwise has a broad societal benefit, way beyond application in policymaking. in that sense, the ability to engage with the ideas of fellow workers and collaborate with them will, for a long time to come, remain one of the prized skills by employers. the mpc schools challenge is therefore a contribution by the sa reserve bank towards improving the understanding by young south africans of how the economy works, why high inflation is bad for an economy and how the monetary policy committee makes