In a pilot project, six schools were chosen to set the repo rate for the monetary policy committee. Aneesa Fazel reports.
There are not too many school students who get to advise Reserve Bank governor Gill Marcus on what to do, especially in the crucial area of setting interest rates, but that is exactly what a group of matrics in Gauteng have done.
Six schools, with a group of five representatives each, were chosen as finalists and given the opportunity to explain to the bank's monetary policy committee what the all-important repo rate should be.
The winning team, from Krugers-dorp High School, analysed economic activity, consumer and government spending, the state of investment and net exports to recommend to Marcus and the committee that the Reserve Bank's key rate, the repo, should remains unchanged.
One of the five students, Paige Luppnow, who plans to study economics next year, said the experience was nerve-racking, "but we were really calm and just took it in our stride".
Another team member, Kgomotso Mogari, thought that the bank needed to have more young people working there. "But the day that we spent at the bank was really exciting and we met really important people such as the governor," she said. The other members of the team were Matthew Jason Schuster, Omphile Whitney Nkosi and Bianca de Magalhaes.
Their teacher, Lize van der Schyff, said it was a great learning experience for the pupils.
"It was amazing to see how economists from the Reserve Bank actually work in the field. In the classroom we teach the basic problems and solutions, but in the real world there are so many different factors to consider and it was good to get exposure to that environment."
This year's monetary policy committee challenge was a pilot project, but it is intended to run across other provinces in the future. The bank's head of group strategy and communications, Hlengani Mathebula, said that it had been impressed by similar challenges that were run by the Bank of England and the Reserve Bank of New Zealand.
"Based on the feedback there, the exposure of students to critical economic concepts such as monetary policy and the inflation outlook, their interest in pursuing studies in economics and the number of young economists coming through the programmes, the bank decided to run a similar challenge.
"The intention is to expose grade 12 economics students and open doors for them to pursue studies in the field. The bank also hopes to employ some of these young people once they have completed their studies," he said.
The committee meets six times a year to analyse key data to determine the repo rate. The six school teams given the task of making this decision used the school holidays to analyse data and then submitted a 1 000-word statement on their repo rate decision.
Each team gave a detailed presentation justifying their decision to a panel of judges and then had a 15-minute question-and-answer session. Questions were asked about employment, the exchange rate and how close the economy was to operating at full capacity.
Van der Schyff said there was concern about the difficulty of the economics curriculum at school level.
"I had a student, now in university, who told me economics was easy because they had learnt most of it in school. The department should consider reviewing the curriculum because it is too much for students. It also dissuades them from taking up the subject. We do not want them to have ridiculously easy exams, but it should at least be reasonable."
She said more needed to be done to get practical exposure to economics.
"A lot is being done to promote science and technology, but to the detriment of subjects like economics. It is important for students to see how theory can be applied in practice before they go on to university or the working world."
Mathebula said the bank's intention was to roll out the challenge nationally. This is likely to happen over a number of years because of logistical challenges.
The judges were impressed with the young talent.
Mathebula said: "They were blown away by the quality of essays and the way in which they answered. One of the students, when asked what he would like to do when he grew up, responded that he wanted to take one of the committee member's jobs, looking him straight in the eyes."
The winning team received a prize of R15 000 and had their names put at the top of the list for possible selection to receive Reserve Bank bursaries. The second team, Hoërskool Stoffberg, won R8 000 and the third, Hoërskool Langehoven, won R4 000.
Nkosi, a member of the winning team, said: "Since my experience at the Reserve Bank, I actually feel like I understand what goes on in the news, especially the markets and the economy."