Message from the Governor
(h7) Globally, it has been a year of extraordinary change.
The ‘great election year’ of 2024 saw voters in 64 countries, including South Africa, heading to the polls – with some remarkable results. Domestically, our election ushered in a new era of coalition politics, reflecting the maturity of our democracy but also presenting new uncertainties.
At the same time, the global environment has changed significantly. A prolonged period of globalisation and integration has given way to acute trade tensions. Conditions remain highly uncertain, making it difficult to guess how the dust will settle. However, it seems highly probable that global conditions will be less benign than before, with worse growth prospects and heightened geopolitical risks.
(h7) The South African Reserve Bank, the oldest central bank in Africa, was established on 30 June 1921.
According to the Constitution of the Republic of South Africa, 1996, the SARB has a clear mandate to maintain price stability, which is vital for balanced and sustainable economic growth. The Constitution emphasises that the SARB must operate independently and without fear, favour or prejudice while fulfilling its primary objective of ensuring price stability.
In addition to its primary mandate, the SARB’s powers and functions, typically performed by central banks, are defined by Acts of Parliament.
The SARB operates not for profit but in the broader interest of all South Africans.
After accounting for certain provisions, payment of company taxes on profits, transfers to reserves and dividend disbursements, the surplus from the SARB’s earnings is remitted to the South African government.
(h4) Price and financial stability for sustainable growth
(h7) The SARB has a fundamental role, as mandated by the Constitution, to maintain price stability to ensure balanced and sustainable economic growth. As a constitutional entity, the SARB is accountable to the people of South Africa.
In addition, the SARB is tasked with protecting and enhancing financial stability; regulating and overseeing financial institutions; issuing and destroying banknotes and coin; and acting as the government’s banker. It also serves as the custodian of the national payment system (NPS), which is crucial to South Africa’s economy.
(h4) Performance highlights
InflationX.X% |
Reserves (Profit after tax)RXX.X billionwas transferred to the contingency reserve |
Currency-producing subsidiariesXXX%of orders from the cash industry met on time and in full
|
Group profit before taxRXX billion(2022/23: 2.1 billion profit) |
SARB profit before taxRXX.X billion(2022/23: 0.7 billion profit) |
Dividends (Shareholder dividend of)RX.X millionin line with the SARB Act (2022/23: R0.2 million)
|
The 2024/25 financial year signals the end of the SARB’s Strategy 2025 and sets the stage for Strategy 20 0. More than two years of Strategy 2025’s cycle were impacted by the COVID-19 pandemic and its effects are still noticeable today. These past five years have been transformative and challenging for the SARB. The conclusion of this strategy cycle offers an opportunity to evaluate our performance, celebrate our successes and pinpoint areas for improvement.
Throughout this period, the SARB’s objectives were guided by its five SFAs and five EFAs. The SARB reviewed and improved the monetary policy implementation framework (MPIF), reformed interest rate benchmarks and extended the measurement and analysis of the economy. Headline inflation remained within the 3–6% target range for 19 consecutive months, with the recent print of 2.7% in March 2025.
The 2024/25 financial year signals the end of the SARB’s Strategy 2025 and sets the stage for Strategy 20 0. More than two years of Strategy 2025’s cycle were impacted by the COVID-19 pandemic and its effects are still noticeable today. These past five years have been transformative and challenging for the SARB. The conclusion of this strategy cycle offers an opportunity to evaluate our performance, celebrate our successes and pinpoint areas for improvement.
Throughout this period, the SARB’s objectives were guided by its five SFAs and five EFAs. The SARB reviewed and improved the monetary policy implementation framework (MPIF), reformed interest rate benchmarks and extended the measurement and analysis of the economy. Headline inflation remained within the 3–6% target range for 19 consecutive months, with the recent print of 2.7% in March 2025.
(h4) Risk management
(h7) The SARB must execute its mandate of price and financial stability in a complex economic and financial environment where risks evolve rapidly. Owing to its critical role in the economy and the functioning of the financial system, the SARB places a strong emphasis on risk mitigation and management.
The SARB’s core functions, whether strategic, operational or policy-driven, come with inherent risks. To manage these risks, the SARB continuously monitors and responds to potential and actual political, economic and regulatory risks stemming from both the global and domestic environments. Additionally, risks associated with strategic initiatives and projects are managed through the SARB’s risk management framework, ensuring they remain within accepted levels of risk tolerance.
Global inflation has moderated appreciably over the past two years, easing to 5.8% in 2024 from 6.7% and 8.7% in the previous two years. This moderation was underpinned by favourable price developments in food and energy, coupled with restrictive monetary policy.
The downward trend is expected to continue, with global headline inflation predicted to average 4.2% in 2025, and further decline to 3.5% in 2026.1 However, the disinflation process has slowed, with the 2024 inflation outturn being 0.4 percentage points higher than projected in October 2024.
