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Why South Africa’s central bank has an insanely high average pay

South Africa’s central bank this week pointed to both price and financial stability as its priority objectives, at a time of increasing inflation.

“The SARB must protect ordinary South Africans against the effects of inflation – which erodes the value of the money in their pockets,” it said in its annual report for 2021/22, published on Monday (27 June).

The South African Reserve Bank is the central bank of South Africa. Its primary purpose is to achieve and maintain price stability in the interest of balanced and sustainable economic growth. Together with other institutions, it also plays a pivotal role in ensuring financial stability.

“The SARB has achieved both its mandates for the financial year, with inflation remaining within the target range and the financial system remaining stable, despite the aftermath of the Covid-19 pandemic,” said governor Lesetja Kganyago. “Frameworks to monitor and mitigate systemic risks are being enhanced to bolster financial system stability even more.”

The governor said that the monetary policy stance has been, and remains, supportive of the recovery, with the repurchase rate currently at 4.75%. With inflation ticking up steadily, the MPC opted to begin the normalisation of the repurchase rate, raising it by 125 basis points since November 2021.

At the May MPC the bank’s forecast of headline inflation for this year was revised higher to 5.9%, up from 5.8%, primarily due to the higher food and fuel prices. While food prices will stay high, fuel price inflation should ease in 2023, helping headline inflation to fall to 5.0%, said Kganyago.

Headline inflation of 4.7% is now expected in 2024, he said.

Salary

The central bank said it paid its 2,305 employees, “whose motivation, skills and diverse thinking assist the SARB in achieving its mandate and supporting objectives,” R2.1 billion in salaries. This represents an average salary per employee of R911,062, and against an average national salary in the private sector, of R282,024.

The governor pocketed R8.45 million for the year, including fringe benefits, while the total remuneration for the group’s four executive directors exceeded R25.4 million.

The bank’s staff complement is largely made up of highly skilled individuals including those in: IT, security, business analysis, economists, economics, finance & accounting, banking regulations and compliance, actuarial science, among others.

SARB said that it aims to attract, develop and retain critical skills and competencies and embed its culture. It pointed to improved the coverage ratio for critical roles to 88% (target: 85%) over the past year, with the average time to fill critical roles being 129 days (previous year 153 days), due to the scarcity of skills.

The bank has an average employee age of 42 years – meaning that most positions are senior roles, while the bank has an incredibly high average service per employee, spanning 11 years. This is some way above the average, with hiring specialist Career Junction saying that most local employees tend not to stay in jobs for more than three years.

“In South Africa, candidates stay about 2 years and 10 months in the same job before moving on,” it said in a recent report.


Read: Here’s what the average household looks like in South Africa


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