SARB OVERVIEW

The Constitution of the Republic of South Africa gives the South African Reserve Bank (SARB) a clear mandate – to pursue and maintain price stability in the interest of balanced and sustainable economic growth.

The SARB Annual Report for the year ended 31 March 2024 outlines how the SARB has gone about delivering on its mandate and offers readers a concise, transparent account of the SARB’s strategy, performance and impact on society, focusing on both financial and non-financial information.

About this report

AGM minutes

Governor’s message

Reflecting on the past year, global conditions remain strained and inflation has been higher than expected. Interest rates have likewise stayed high and the dollar remains strong, to the detriment of most other currencies including the rand. Geopolitical tensions have intensified, with conflict spreading in the Middle East. These are difficult circumstances for South Africa and other emerging markets.

The past year has also featured serious domestic challenges. Last year’s electricity load-shedding was the worst on record. We also saw major disruptions to port and rail infrastructure. In these circumstances, the economy grew just 0.6%, one of the slowest growth rates in our modern history.

Performance highlights

Inflation

6.0%

(2023 calendar year)

5.5% (financial year)

Reserves

Profit after tax of

R13.0 billion

was transferred to the contingency reserve

Currency-producing subsidiaries

100%

of orders from the cash industry met on time and in full

Group profit before tax

R20.0 billion

(2022/23: R2.1 billion profit)

SARB profit before tax

R18.3 billion

(2022/23: R0.7 billion profit)

Dividends

Shareholder dividend of

R0.2 million

in line with the SARB Act (2022/23: R0.2 million)

Policy implementation

Summarised financial statements

What we do

Price and financial stability for sustainable growth

The SARB maintains price stability in the interest of balanced and sustainable economic growth. The SARB is also tasked with protecting and enhancing financial stability; regulating and supervising financial institutions; issuing and destroying banknotes; and acting as banker to the government, lender of last resort and the designated Resolution Authority in terms of the Financial Sector Regulation Act 9 of 2017, as amended (FSR Act). It is also the custodian of the national payment system (NPS), which is crucial to the functioning of South Africa’s economy.

Monetary policy

Financial stability

Prudential regulation

DELIVERING THE SARB STRATEGY

The SARB’s strategy is formulated to fulfil its price and financial stability mandates and the additional priorities that various laws assign to the organisation. This strategy is articulated through five strategic focus areas (SFAs) that the SARB considers essential in achieving its mandate. This is supported by five enablement focus areas (EFAs) that drive the strategy’s execution.

Advancing Strategy 2025

HOW THE SARB IS GOVERNED

The SARB supports the overarching goals of King IV^TM Report on Corporate Governance for South Africa, 2016 and has implemented the principles of responsibility, accountability, fairness and appropriate transparency, in line with legislation governing the SARB.

The South African Reserve Bank Act 90 of 1989, as amended (SARB Act) requires its Board of Directors to have 15 members, comprising the Governor and three Deputy Governors who serve as executive directors, as well as four non-executive directors appointed by the President of the Republic of South Africa – after consultation with the Minister of Finance – and seven shareholder-elected, non-executive directors. Neither the Board nor the SARB’s shareholders play any role in determining monetary policy, financial stability policy or regulation and supervision of the financial sector.

The Board

The Board is responsible for the corporate governance of the SARB. It ensures compliance with principles of good governance and adopts policies for the sound accounting, administration and functioning of the SARB. It also ensures these functions and duties are fulfilled. The SARB Act and the Board Charter define the Board’s responsibilities.

Risk management

The operations of the SARB continue to evolve in an economic landscape and financial system that are changing rapidly and becoming more complex. These changes present both risks and opportunities for the SARB as it executes its price and financial stability mandates. Operationally, the SARB is exposed to significant inherent risks in many of its core functions. These risks include strategic, policy process and operational risks – such as business continuity, cybersecurity, information security and compliance – as well as reputational, project and financial risks.