Who owns the Reserve Bank?

Following President Cyril Ramaphosa clarification of his intentions to nationalise the South Africa Reserve Bank (SARB), the M&G Data Desk decided to take a closer look at the current ownership. 

The SARB has more than 700 shareholders spread across the world with the second highest number of shares in German hands. From illuminati theories and millionaire dreams and some who don’t know they have shares, the central bank’s private owners are a mixed bag of shareholders.

“We have a situation where we have external shareholders. This [changing ownership] has been done by a number of countries around the world. There are some six countries in the world that have external shareholders in the bank, and we are one of them,” Ramaphosa said this Thursday during a question-and-answer session. 

READ MORE: Ramaphosa to MPs: We will nationalise the Reserve Bank

Despite the fact that shareholders have no power over Reserve Bank policy, ownership over the 2 million shares at the bank became the subject of a bitter battle at the ANC’s Nasrec elective conference in 2017 — between the supporters of Nkosazana Dlamini-Zuma and those of President Cyril Ramaphosa — resulting in a resolution that the bank should be nationalised. The Economic Freedom Fighters have also for years mooted their aspiration to change the law and allow for the nationalising of the bank.

At the bank’s annual general meeting last year, the governor, Lesetja Kganyago, noted that there are shareholders who also want to bank to be nationalised.


“They believe that they are entitled to a share of the assets of the SARB and see this as an opportunity to make enormous profits at the expense of taxpayers. This could turn out to be a protracted legal process and a very expensive exercise for what would, at best, be a cosmetic gain. To reiterate, whatever the shareholding structure, the primary mandate of the SARB will remain unchanged,” he said.

Shareholder dividends are limited to ten cents per year and the largest shareholder of 20 000 shares receives about R2 000 a year.

By analysing the Shareholders Index Report published monthly, the M&G Data Desk found that the highest number of shares belong to Capetonians at 114 320, followed by Germans who own 91 850 shares and then people who reside in Pretoria who own 52 186.

Of the 783 shareholders, 58 (8.2%) are foreigners, residing in countries such as Germany, Norway, Australia and the United Kingdom. Both Germany and the United Kingdom include the largest number of foreign shareholders with 16 residing in each. Although, shareholders with their primary addresses listed in Germany own 4.6% of all the shares while those in England own 0.7%.

“The Reserve Bank should be owned by the people of SA, not external shareholders,” Ramaphosa said during his final question-and-answer this week.

The Reserve Bank’s spokesperson, Ziyanda Mtshali, said she could not speculate on the reason why someone from Norway would want to acquire shares in the bank.

“Although it (SARB Act) does not prohibit such shareholding, it prohibits any SARB shareholder who does not ordinarily reside in the RSA from voting at any meetings of the Bank,” she said.

The shareholder’s power does not extend to making any decisions on policy and when they attend the annual general meetings they have the power to elect seven non-executive directors. At these meetings, they can also discuss the bank’s annual report and the auditors’ report.

The bank’s private shareholding is held by plastic manufacturing companies, agricultural groups, a widow and orphan organisation, professors, doctors and banks, amongst others.

At least four of the shareholders are farmers unions, such as Hertzogbrug Farmers Union and the Free State Agriculture Union. Agri South Africa owns 1 000 shares it wasn’t aware of before M&G reached out for comment. AgriSA’s Omri van Zyl said he didn’t know why the organisation would own shares.

“Pre 1994, having shares played a key role in monetary policy and the determination of prices as they weren’t dictated by the market. Those days it would’ve been important to be part of the Reserve Bank.”

Pietman Roos, Head of Corporate Affairs and Communication at Agri SA, added that current private shareholding structure is purely ceremonial.

“Back in the day, they [the Reserve Bank] needed the capital. Over time it faded into a more ceremonial shareholding. What’s also important is that the Reserve Bank is really good in its transparency — it’s rated as one of the best in the world.”

In August last year, the EFF tabled an amendment to the SARB Act of 1989 in Parliament to change the law governing the bank to essentially nationalise it and ensure its non-executive directors are appointed by the finance minister rather than shareholders.

Shareholders like Abdoolrawoof Ahmed from Lenasia agree with Kganyago, that it would be wrong for people to demand a share in the country’s reserves but he does hope one day that his 10 000 shares will score him a million rand if nationalising the bank happens.

“I got the shares a couple of years ago to educate myself and increase my knowledge about the bank and how it works. But as a shareholder, I have very little influence; so whether it’s nationalised or not no one can actually get shares in the country’s reserves,” he said.

Professor Jannie Rossouw, head of the Witwatersrand School of Economic & Business Sciences, who also owns shares at the bank, said the powers of the shareholders of the central bank are limited to the point that nationalisation will not make a difference, but the most important aspect of the debate should be the autonomy of the bank.

Founded in 1921, the SARB has always had private shareholders. The Reserve Bank is one of eight in the world who have private shareholders including Greece, Belgium, Japan, San Marino, Turkey, Italy and Switzerland.

The largest shareholder overall is the South African Mutual Life Assurance Society with a maximum of 20 000 shares. This is followed by SA Police Widows’ & Orphans’ Fund which owns 10 520 shares and declined to comment. Another fund that owns 10 000 shares is the Crocodile Valley Provident Fund which was allegedly sold four years ago.

When the company that owned the fund, Crocodile Valley Citrus was contacted, an employee who did not want to provide his name said the fund was sold years ago with the company and he did not know who owns the shares today.

Other notable entities include 30 trusts and 29 estates and the three big banks in the country — First Rand Bank, Standard Bank and ABSA.

The shareholder’s index refers to 35 people with doctor titles and 5 as Professors. A semi-retired chiropractor, Dr Roy Skinner, from Port Elizabeth said that curiosity drove him to buy shares 20 years ago.

“I’m a strong believer in the Illuminati of international finances and bought into the bank to get an idea of how the reserve bank works,” Skinner says.

Another professor who owns shares in the Reserve Bank is economics professor Raymond Parsons from North-West University. In 2004, Parsons was appointed to the non-executive board of the Reserve Bank by the then finance minister, Trevor Manuel, during which time he decided to buy shares.

The professor says he thought it appropriate to have a nominal stake in the institution on whose board he’s already serving. “It added an extra layer of transparency to see what information was being disseminated to shareholders, thus strengthening the due diligence role of non-executive directors.”

Parsons adds that although non-executive directors at the SARB have no say in monetary policy, they serve a valuable corporate oversight role over the bank’s affairs and act in a general corporate governance role.

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M&G Data Desk
The Data Desk is the centre for data journalism at Mail & Guardian

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