SA Reserve Bank Governor Lesetja Kganyago. FILE PHOTO: Jonisayi Maromo/ANA
JOHANNESBURG - SA Reserve Bank (Sarb) governor Lesetja Kganyago's salary rose from R6.8 million in 2017 to R7m for the year ended in March as the central bank reported profit before tax of R3.2billion from R2.1bn in the previous year.

Kganyago’s three deputies also saw a significant jump in their earnings, with Daniel Mminele's remuneration increasing to R5.1m from R4.9m, while Francois Groepe’s rose to R5.1m from R4.9m and Kuben Naidoo’s to R5m from R4.7m last year.

Sarb has had to fend off numerous challenges to its independence, chiefly from Public Protector Busi Mkhwebane, who called for a change in the bank’s mandate from price stability to one of “ensuring that the socio-economic well-being of the citizens is protected”.

Kganyago said in the annual report that the central bank would “vigorously defend” challenges to the bank’s independence and constitutional mandate.

He said nationalising Sarb would also be expensive, as its shares currently trade for much less than the price at which some existing shareholders are willing to sell their shares.

Cosmetic changes

“The ‘buying-out’ of existing shareholders will, therefore, result in paying large sums of money to effect cosmetic changes that will have no bearing on the manner in which the Sarb carries out its mandate or executes its policy responsibilities,” Kganyago said.

The ANC’s National Executive Committee, its highest decision-making body between conferences, last month said it had tasked its economic transformation committee with starting the process of nationalising the central bank.

The rights of the private shareholders at the central bank are highly circumscribed. A shareholder cannot hold more than 10000 shares out of the total of 2million shares in issue. According to the Sarb Act, shareholders receive a fixed annual dividend of 10c per share, making the total dividend payout each year R200000.

Sarb said the banking sector in South Africa could be exposed to risk, depending on how the proposed policy of land expropriation without compensation is implemented.

The central bank also flagged the rising US trade protectionist measures and potential retaliation by other jurisdictions continued to pose a risk to South Africa’s financial stability.

- BUSINESS REPORT