South African Reserve Bank
Note on the corporatisation of the Public Investment
Commissioners
by N Gumata and M Magadze1
Introduction
1 The authors wish to
express their sincere appreciation to the Money and Banking
Division for their valuable
contributions.
The Public Investment Corporation Act came into effect on 1 April 2005, replacing the
1984 Public Investment Commissioners Act. The Act converted the Public Investment
Commissioners (PIC) into a statutory body, owned solely by government, which is to
function as a non-bank provider of financial services. The institution will be subject to the
Financial Advisory and Intermediary Services Act and will be governed by the
Companies Act.
The corporatisation of the Public Investment Commissioners affects the compilation and
comparability of some time series released by the Bank and published in the statistical
tables of the Quarterly Bulletin. This note is intended to provide brief background
information on the historical development of the institution and to outline how its new
legal status will be accommodated in the monetary statistics.
Historical development
The Public Investment Commissioners evolved from the Public Debt Commissioners
which was established by the Public Debt Commissioners Act, 1911, as an independent
board of commissioners entrusted with the custody and investment of certain funds,
mainly owned by the public sector. The objective was to place the administration and
management of public-sector pension funds under the control of one authority.
With effect from 31 March 1984 the amended Public Debt Commissioners Act, 1969, was
superseded by the Public Investment Commissioners Act, 1984, and the Corporation for
Public Deposits Act, 1984. The new Acts provided for the rationalisation of the functions
of the Public Debt Commissioners. All the short-term pooled funds were transferred to the
newly formed Corporation for Public Deposits – a wholly-owned subsidiary of the South
African Reserve Bank. The remaining assets and liabilities (essentially long term in nature)
were transferred to the Public Investment Commissioners.
Statistical treatment of PIC deposits with banks
In the monetary analysis the Corporation for Public Deposits was classified as part of the
monetary banking sector because of its activities as a taker of short-term deposits, its
close relationship with the Reserve Bank and the availability of its deposit liabilities for
furthering the efficiency of monetary policy management.
The entity Public Investment Commissioners was not classified as part of the monetary
banking sector. Accordingly, deposits entrusted to it by the public-sector pension funds
and other institutions were excluded from the monetary sector’s deposit liabilities. The
reasoning was that these deposits with the Public Investment Commissioners were
longer-term funds that were subject to fluctuations in value. They were largely invested
in securities which did not belong to the Public Investment Commissioners as the
Commissioners were merely acting as investment nominees on behalf of various
investment accounts of public and private institutions. Moreover, these funds were
largely used to finance government expenditure and would find their way back to the
monetary system in the normal course of events.
64
Quarterly Bulletin June 2005
South African Reserve Bank
In the monetary analysis the Public Investment Commissioners was treated as part of
the government sector. The corporatisation of the Public Investment Commissioners
necessitates a re-classification in the monetary analysis from the government sector to
the “private and other domestic sectors” category. This implies that the Public
Investment Commissioners’ deposits with banks should be included in M3. It may be
noted that in the national financial accounts the Public Investment Commissioners has
always been treated as a separate institutional sector. In that area no statistical changes
therefore need be contemplated.
The inclusion of PIC deposits in broad money supply
As mentioned earlier, the Public Investment Commissioners has been classified since
their inception in 1984 as part of the government sector in the monetary sector
accounts. The accompanying graph shows the contribution of the Public Investment
Commissioners’ deposits to the overall level of government deposits2.
Government deposits with the monetary sector
2 It should be noted that
monthly data for the Public
Investment Commissioners’
deposits with the monetary
sector are only available from
January 1996. As a result, the
inclusion of the Public Investment
Commissioners’ deposits in the
monetary aggregates could only
be effected since that date.
R billions
200
150
100
50
0
1996
1997
1998
1999
2000
2001
2002
2003
2004 2005
Total government deposits
Central and provincial governments, and social security funds
Public Investment Commissioners
On average, since 1996 the Public Investment Commissioners’ deposit liabilities have
contributed 40 per cent to total government deposits. The re-classification of the Public
Investment Commissioners requires that these deposits should now be included in the
broadly defined money supply (M3). At the same time, the government deposits with the
monetary sector have to be reduced by a similar magnitude while net claims on the
government sector of the monetary sector have to be raised.
In summary, the classification of the Public Investment Commissioners as a non-bank
public-sector financial entity will raise the level of all the monetary aggregates. Doing this
will affect twelve-month growth rates only marginally. The impact of the inclusion of the
Public Investment Commissioners’ deposits in M3 is shown in the accompanying graph.
Quarterly Bulletin June 2005
65
South African Reserve Bank
Growth in M3
Percentage change over twelve months
25
20
15
10
5
1996
1997
1998
1999
2000
2001
2002
2003
2004 2005
M3 before revision
M3 after revision
For ease of comparison, attachments are provided on the following pages showing
original and revised data for M1A, M1, M2 and M3. Quarterly Bulletin tables S – 10, 18,
19, 23, 24 and 148 will also be affected. In all statistical tables references to the Public
Investment Commissioners have been changed to Public Investment Corporation.
References
Van Staden, B. 1963. “A monetary analysis for South Africa”. Quarterly Bulletin, No 67,
March. Pretoria: South African Reserve Bank.
De Swardt, C J and Steenkamp, G. 1969. “The Public Debt Commissioners – Their
operations and role in the financial structure of South Africa”. Quarterly Bulletin, No 92,
June. Pretoria: South African Reserve Bank.
South African Reserve Bank. 1984. “The restructuring of the Public Debt Commissioners,
establishment of the Corporation for Public Deposits and dissolution of the National Finance
Corporation”. Quarterly Bulletin, No 152, June. Pretoria: South African Reserve Bank.
66
Quarterly Bulletin June 2005
South African Reserve Bank
Original and revised M1A data
R billions
1996: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1997: Jan ...............
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1998: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1999: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
2000: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Quarterly Bulletin June 2005
Excluding
PIC
Including
PIC
61,4
64,5
65,4
66,1
68,4
70,5
68,1
72,7
73,8
72,1
77,5
82,3
76,9
80,1
82,2
82,4
80,3
87,7
85,3
85,6
92,4
94,3
97,6
101,2
94,7
104,0
102,8
110,3
102,3
108,2
104,1
108,5
108,7
112,4
113,7
114,8
109,3
109,1
115,7
114,6
116,2
124,1
121,7
129,4
131,1
130,5
140,2
145,1
137,6
141,1
137,0
138,4
136,7
139,3
129,2
132,0
67,5
71,9
72,7
71,0
73,4
76,0
74,6
80,4
82,7
81,1
84,6
89,9
85,0
87,6
87,5
86,9
84,9
93,2
92,8
93,6
104,6
104,4
102,8
105,1
100,3
113,2
110,7
116,4
105,7
109,7
104,9
110,7
113,1
114,8
116,0
118,2
113,5
113,6
121,2
121,4
120,8
129,6
126,8
137,2
140,2
137,1
148,0
152,2
145,0
147,8
143,2
144,7
142,3
145,7
135,5
139,0
2001:
2002:
2003:
2004:
2005:
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
Excluding
PIC
Including
PIC
140,2
137,2
138,5
147,6
137,9
141,5
135,4
142,8
140,6
148,6
149,7
152,2
152,8
159,6
166,5
175,3
162,8
166,7
173,4
169,2
170,5
175,2
176,7
182,5
185,1
176,3
188,5
191,0
181,3
180,2
180,3
181,4
174,2
183,3
182,5
184,3
190,4
192,7
201,3
211,0
209,4
220,0
207,2
212,1
211,9
216,7
209,9
215,1
222,1
221,5
229,1
236,9
230,6
233,6
235,0
247,8
145,5
141,5
144,0
152,7
142,6
147,1
138,1
146,0
144,9
154,3
154,6
159,7
155,5
163,6
169,8
176,1
164,3
172,0
176,5
174,3
174,6
180,4
182,4
192,5
193,5
181,3
193,3
197,0
185,4
188,2
187,3
185,3
179,3
187,7
186,1
191,0
204,6
198,0
211,0
219,0
214,1
232,7
215,5
220,3
217,5
225,4
219,0
229,7
234,5
229,3
235,5
244,5
235,8
244,7
241,2
261,3
67
South African Reserve Bank
Original and revised M1 data
R billions
1996: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1997: Jan ...............
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1998: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1999: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
2000: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
68
Excluding
PIC
Including
PIC
105,9
112,5
118,6
119,5
121,8
126,2
122,8
128,7
132,8
134,9
140,2
147,6
140,0
145,3
154,2
146,4
147,0
150,3
146,1
152,9
164,3
166,1
173,0
173,1
171,1
178,5
177,2
183,4
185,1
203,3
205,5
219,6
219,6
210,3
216,1
213,9
209,8
205,0
216,1
212,4
213,3
220,4
220,7
227,5
228,9
238,2
255,3
258,3
246,2
256,7
252,7
256,1
251,5
257,4
244,9
246,5
112,0
121,4
127,7
126,0
127,7
132,8
130,8
137,1
142,3
146,1
148,3
156,1
149,7
154,9
163,4
154,1
154,7
159,5
159,4
166,7
180,6
181,9
183,2
182,4
184,4
192,8
190,3
194,0
193,0
208,0
210,4
225,0
226,3
216,1
223,0
223,0
220,6
216,2
227,9
224,4
225,2
232,7
228,0
237,7
241,2
247,8
267,1
269,3
257,3
266,7
262,7
264,7
259,3
265,9
253,3
255,1
2001:
2002:
2003:
2004:
2005:
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
Excluding
PIC
Including
PIC
261,0
257,9
258,8
266,9
263,8
265,2
268,8
274,8
274,2
279,5
280,4
287,9
289,0
288,4
302,0
313,2
321,7
327,2
335,2
332,3
343,2
339,7
331,7
336,8
348,4
339,9
346,4
350,6
342,2
336,8
344,4
341,6
329,7
331,2
331,8
332,6
346,3
352,6
362,4
378,2
386,8
401,9
392,7
386,0
382,5
393,7
382,2
391,2
406,6
404,9
412,7
412,3
408,9
418,6
425,6
440,0
268,1
264,0
266,6
274,4
272,4
274,2
275,4
281,7
281,7
288,3
289,1
299,5
295,9
295,9
308,6
315,6
324,7
335,2
341,2
340,0
350,0
347,0
339,4
349,0
359,3
346,3
353,0
358,3
347,0
345,2
352,9
347,0
335,9
336,8
336,4
339,7
362,1
359,7
373,7
387,8
392,1
415,7
402,2
395,3
389,1
403,3
392,5
407,0
420,2
415,4
419,9
421,5
416,0
431,8
432,6
455,6
Quarterly Bulletin June 2005
South African Reserve Bank
Original and revised M2 data
R billions
Excluding
PIC
1996: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1997: Jan ...............
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1998: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1999: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
2000: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Quarterly Bulletin June 2005
237,8
247,5
255,1
257,2
263,3
268,5
266,8
270,4
271,6
274,0
279,7
284,4
283,2
290,8
300,6
299,1
305,7
303,5
301,8
308,6
319,0
325,5
334,8
337,5
336,1
346,2
346,1
354,1
356,5
368,6
367,5
377,2
379,2
370,9
380,9
383,4
376,1
366,1
376,1
381,4
382,9
392,7
397,7
401,1
413,4
416,3
427,7
435,5
427,3
432,9
428,5
431,4
429,3
431,4
423,4
429,7
Including
PIC
244,0
256,4
265,2
264,8
270,0
276,8
277,1
281,8
283,3
287,0
289,8
295,3
295,6
303,0
313,7
309,5
316,6
316,5
317,4
324,6
338,3
343,2
348,0
350,8
351,6
363,5
361,5
366,7
366,6
376,0
375,3
385,3
387,5
378,3
389,2
394,0
389,1
380,0
391,6
395,4
396,9
408,0
407,6
413,7
427,4
426,8
440,3
447,1
439,0
443,6
439,0
440,7
437,9
441,2
433,3
440,0
Excluding
PIC
2001:
2002:
2003:
2004:
2005:
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
443,0
441,1
450,0
462,2
459,6
467,3
479,6
479,3
479,3
478,8
485,7
498,2
496,9
497,9
510,9
535,1
551,2
558,8
571,6
567,2
581,8
568,0
563,7
577,2
585,7
597,8
610,1
618,7
626,2
628,4
632,7
654,8
660,8
665,5
669,0
671,1
680,1
692,8
699,7
712,9
719,0
732,4
726,0
729,8
730,7
730,2
728,6
739,7
762,1
778,2
780,3
791,7
794,7
815,3
817,6
846,5
Including
PIC
452,6
450,6
461,3
474,8
474,1
483,0
491,4
490,8
491,5
492,8
497,9
513,4
508,2
510,4
522,8
544,1
560,8
573,4
585,1
581,2
594,4
579,1
573,8
591,4
598,3
607,6
621,4
632,6
639,5
646,3
651,0
671,3
680,4
684,5
687,0
690,0
706,7
711,1
721,1
733,5
734,9
756,8
748,5
750,7
748,2
749,0
748,7
766,8
790,4
807,5
805,3
818,7
817,8
840,4
835,1
870,2
69
South African Reserve Bank
Original and revised M3 data
R billions
Excluding
PIC
1996: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1997: Jan ...............
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1998: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
1999: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
2000: Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
70
273,4
282,7
289,2
291,4
298,1
304,4
302,4
306,4
308,5
311,3
316,1
319,4
319,3
327,6
336,8
337,7
343,8
343,0
342,8
349,0
358,8
363,7
372,5
374,2
374,3
386,6
387,9
396,9
399,2
409,5
406,9
414,3
418,6
415,6
426,0
428,7
420,8
413,6
426,3
425,4
425,6
435,9
438,2
436,6
450,7
452,8
463,9
472,2
463,3
470,8
469,0
471,6
469,7
473,1
464,5
474,3
Including
PIC
279,6
291,7
299,3
299,0
304,8
312,7
312,8
317,9
320,3
324,3
326,2
330,4
332,1
340,3
350,4
348,6
355,2
356,4
359,0
365,5
378,5
381,9
386,1
387,8
390,2
404,3
403,6
409,8
409,7
417,1
415,0
422,6
427,1
423,2
434,6
439,7
434,2
427,8
441,5
439,9
439,9
451,3
448,2
449,3
464,9
464,7
478,3
485,6
477,0
483,6
481,6
483,1
480,5
485,4
476,8
487,2
2001:
2002:
2003:
2004:
2005:
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
May................
Jun.................
Jul..................
Aug ................
Sep ................
Oct.................
Nov ................
Dec ................
Jan.................
Feb ................
Mar ................
Apr.................
Excluding
PIC
Including
PIC
490,7
488,2
494,2
507,6
505,9
515,1
529,3
529,7
533,0
538,2
546,8
559,2
561,7
560,6
576,3
595,5
616,4
625,5
636, 8
637,7
658,2
651,0
655,1
662,1
668,1
681,4
692,8
698,0
705,4
708,1
715,3
733,9
738,0
745,4
748,4
744,1
752,2
763,3
775,1
783,6
794,2
813,4
817,0
826,1
825,6
833,6
832,7
842,7
862,8
877,1
885,4
883,8
889,3
912,5
914,2
941,1
502,2
499,2
506,2
520,6
522,0
531,8
542,6
542,3
546,5
555,3
562,7
578,1
577,7
576,9
592,0
606,3
628,5
641,7
651,2
653,1
672,9
665,2
668,4
679,9
684,5
696,0
709,1
715,8
722,2
730,6
738,2
754,2
761,3
768,4
770,6
766,7
784,2
787,2
801,1
808,0
813,8
842,2
844,1
850,5
845,5
855,0
857,2
873,8
897,1
909,6
913,6
914,1
917,7
946,8
946,1
978,0
Quarterly Bulletin June 2005