Tshazibana warns climate and water shocks amplify financial risks
South African Reserve Bank Deputy Governor Fundi Tshazibana called on financial institutions to integrate nature-related drivers and water stress into climate risk frameworks. Speaking at a Bloomberg event on September 30, 2026, she emphasized shorter scenario horizons.
From physical shocks to balance sheets
Tshazibana highlighted how extreme weather translates into financial stability risks across southern Africa.
In South Africa, the 2022 KwaZulu-Natal floods cut manufacturing production by 6 percent and cost 1.8 percent of Durban's gross domestic product, while 2026 regional floods caused 4 billion rand in damage.
In Zambia, drought triggered 21-hour power blackouts and hit mining, which provides over 50 percent of exports, prompting a 5 billion kwacha central bank liquidity facility.
Tshazibana noted that Africa's insurance penetration stands at roughly 3.5 percent of GDP, leaving large protection gaps that concentrate losses on households, businesses and public finances.
Supervision beyond the green label
The South African Reserve Bank conducted its first climate stress test in 2025, uniquely incorporating retail exposures.
The central bank is developing a climate dashboard covering physical and transition risks and assessing water infrastructure vulnerabilities.
“The task is not to attach an environmental, social and governance label to existing activity,” Tshazibana said, but to trace transmission channels.
The Prudential Authority is rolling out disclosure guidance aligned with global standards.
Real risks beat green labels
Focusing on tangible threats like water stress grounds central bank climate work in macro reality.
Yet advanced stress tests cannot substitute for basic physical infrastructure and insurance protection.
Without faster private capital deployment, analytical progress will do little to shield balance sheets.