South African Reserve Bank Governor Kganyago outlines response to populist pressures and highlights payments modernisation and lower inflation target push

In a keynote address to the Arbitration Foundation of Southern Africa, South African Reserve Bank Governor Lesetja Kganyago argued that rising populist pressure on public institutions increases the premium on institutional performance, transparency and effective communication. He used the South African Reserve Bank (SARB) as a case study, pointing to recent work on transparency, a renewed case for a lower inflation target, and planned modernisation of the national payments ecosystem. Kganyago cited the SARB’s 2017 court challenge against a Public Protector recommendation that would have removed the SARB’s price-stability mandate without reallocating it, as an example of defending institutional independence. On transparency, he noted the SARB volunteered for an International Monetary Fund review of its transparency practices, which included recommendations on the Gold and Foreign Exchange Contingency Reserve Account (GFECRA); he indicated these recommendations, including expanded website disclosure and more regular publication of balances, have been implemented. On monetary policy strategy, he highlighted that South Africa’s inflation target has remained at 3–6% since 2000 after a planned shift to 3–5% was postponed in 2001, and said the SARB is convinced South Africans would be better off with lower inflation and a lower target. On payments, he said the SARB has recently acquired a 50% stake in BankservAfrica and intends to use that investment, alongside government and industry, to drive a major modernisation of payments infrastructure, including retail-level digital payments designed to be cheap, safe and fast alongside cash.