Introduction
The South African Reserve Bank Amendment Bill of 2018 (the "SARB Amendment Bill") has again become the subject of a vigorous debate following the public hearing held by Parliament of South Africa on 2 July 2025. In essence, the SARB Amendment Bill proposes to nationalise the South African Reserve Bank (the "SARB") by: (i) making the State the sole shareholder of the SARB and (ii) empowering the Minister of Finance (the "Minister") to appoint all directors of the SARB.
Independence of the SARB
A central concern is whether nationalising the SARB would undermine its independence. In this regard, the Constitution of South Africa (the "Constitution") expressly obliges the SARB to perform its functions independently. This constitutional safeguard is not dependent on who owns the SARB. In fact, the shareholders of the SARB (the "Shareholders") do not influence the policy, regulatory or supervisory decisions of the SARB. It is therefore crucial to clarify what the Shareholders are currently able to do. The South African Reserve Bank Act of 1989 (the "SARB Act") limits the Shareholders' functions to: (i) considering annual financial statements; (ii) electing half of the non-executive directors (the "Board"); and (iii) appointing external auditors. If the Minister were to assume all these roles, the practical impact on the SARB should, in theory, be minimal. Firstly, the Minister already has access to the annual financial statements of the SARB. Secondly, the Board (regardless of how it is constituted) must already consult the Minister when performing its functions. Lastly, external auditors are, in any case, required to operate independently and in accordance with international standards.
In this regard, it is crucial to also consider the International Monetary Fund's working paper of 2024 (the "IMF Paper"). , which sets out "A New Measure of Central Bank Independence" The IMF Paper challenges the existing view that a central bank's board is more independent if appointed by private shareholders, noting that this perspective "is no longer fully aligned with current views on central bank independence". At the same time, the IMF Paper cautions against a model in which the board is appointed solely by the State. These guidelines seem to support the SARB Amendment Bill in making the State the sole shareholder of the SARB, while opposing the proposal that the Board be appointed solely by the Minister.
Expropriation concerns
The most contentious aspect of the SARB Amendment Bill is probably the proposal to expropriate all SARB shares without compensation to the existing Shareholders. Any such expropriation must be assessed in light of the Constitution and the Expropriation Act of 2024. The Constitution permits expropriation only if it is:
"(a) for a public purpose or in the public interest; and
(b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court."
The Expropriation Act generally aligns with the Constitution, except in certain cases involving land expropriation for nil compensation. As the SARB Amendment Bill concerns shares rather than land, the prevailing legal framework in South Africa would require the State to compensate Shareholders for their shares.
Affected shareholders
The SARB no longer publishes its shareholders' register online due to the Protection of Personal Information Act of 2013 (the "POPI Act"), which came into effect in 2021. The last publicly available shareholders' register reflected a diverse mix of local and international investors, which included both organisations and individuals. Some of the most notable names in that register were the Nelson Mandela Children's Fund, the Anton Rupert Trust, and the late former Minister Tito Mboweni. Following the POPI Act, anyone wishing to inspect the latest shareholders' register may do so at the SARB Head Office, subject to prior arrangement.
Affordability
Another key consideration, especially from the public's perspective, is whether the State can afford to acquire all SARB shares. The market value of SARB shares is not publicly available as they are not listed on a stock exchange and are traded on an over-the-counter market. However, based on the share price data published by the SARB on 8 July 2025, it would cost the state approximately ZAR20 million to acquire all shares in the SARB at value. This suggests that affordability, while a factor, is unlikely to prohibit the State from adopting the SARB Amendment Bill.
Investor confidence in South Africa
Despite constitutional and legislative protections, the SARB Amendment Bill is likely to have implications for investor confidence. Most investors regard the independence of a central bank as the most crucial safeguard against politically motivated monetary policy. However, as most investors ought to know, nationalising the SARB would not be an anomaly. In fact, the SARB is one of only nine central banks that still has private shareholders. Most central banks globally are wholly state-owned and yet maintain operational independence.
Conclusion
It seems that the most crucial question should not be whether the SARB is owned by the state or by private shareholders, but rather, whether its operational independence is maintained. Provided that constitutional protections are upheld, nationalisation of the SARB should not, in itself, compromise the SARB's ability to perform its functions.
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