The How‑To Note, released in March 2026, highlights that more than 30 emerging and developing economies now use inflation targeting, but face tougher conditions than advanced economies, ranging from volatile food and energy prices to less anchored public expectations and weaker institutional frameworks.

According to the IMF, African economies that target inflation typically set higher goals than advanced peers: between 2.5% and 6%, compared with the 2% norm in Europe and North America. This reflects structural realities such as exchange‑rate pass‑through, heavier reliance on imported commodities, and the need for prices and wages to adjust more flexibly in fast‑changing economies.

The report strongly recommends that countries target headline inflation, the measure most familiar to households, rather than narrower “core” indices. It argues this approach better aligns with public understanding, wage‑setting behaviour, and indexation practices common across emerging markets.

Another key recommendation is for central banks to maintain a medium‑term target horizon, typically around two years. Very short horizons, the IMF warns, risk undermining credibility by forcing policymakers to react aggressively to temporary supply shocks, such as food shortages or swings in global oil prices.

Many emerging economies, including South Africa, Ghana, Kenya and Uganda, also use inflation bands to manage volatility. The IMF notes that while bands can aid communication and accountability, they must not be treated as “zones of indifference”; central banks should consistently emphasise the midpoint as the true objective.

Finally, the paper urges African governments and central banks to conduct inflation‑target reviews sparingly, ideally every five years, and to announce them well in advance to avoid any suggestion of political interference. Frequent target changes, it warns, are linked to weaker anchoring of inflation expectations.