Lesetja Kganyago: Overview of the South African economy

Address by Mr Lesetja Kganyago, Governor of the South African Reserve Bank, at the 102nd annual ordinary general meeting of the SARB shareholders, Pretoria, 29 July 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

Good morning, ladies and gentlemen. We convene our annual Ordinary General Meeting (AGM) virtually for the third time in a row – and hopefully for the last time in this format.

We have managed our way through the severe and tragic global calamity of Covid19. Mobility and activity restrictions, public health, fiscal and monetary efforts, in South Africa and abroad, have been unprecedented. In the early days of the pandemic, the South African Reserve Bank (SARB) cut the repurchase (repo) rate to an all-time low of 3.5%, pulling the prime rate down to a 54-year low of 7.0%.

The successful vaccine roll-out, the repeal of COVID-19 protocols and the opening of borders have propelled the economic recovery forward, recreating jobs, and raising output back to above pre-pandemic levels. Given the size of the pandemic shocks to our economies, with hindsight, it should not surprise us that the aftermath has been tumultuous. Recovery has not progressed in a neat, linear way, but rather has been slowed by unforeseen constraints. The reconnection of global supply chains has been halting and subject to shifting policies and priorities, contributing to high prices for many goods and commodities.