CMA seigniorage transfers drop to R1.1 billion after 2023 peak
South Africa transferred an estimated R1.1 billion in seigniorage compensation to Eswatini, Lesotho and Namibia in fiscal 2025/26. The payments under the Multilateral Monetary Agreement declined from a peak of R1.4 billion in 2023/24 as bond yields and currency growth moderated.
Formula links payouts to bond yields
Under the Multilateral Monetary Agreement, South Africa compensates member states for seigniorage revenue forgone because the rand circulates alongside local currencies.
The formula uses two variables: the estimated stock of rand in circulation and two-thirds of the South African 10-year government bond yield.
Annual payments rose from R1.0 billion in fiscal 2019/20 to a record R1.4 billion in 2023/24 before falling to R1.1 billion in 2025/26. Annual payment growth swung from 21.1 percent in 2020/21 to minus 12.5 percent in 2025/26. This contraction reflected both lower bond yields and a slowdown in South African cash growth from 7.5 percent to 1.1 percent over the same period.
The seventy percent rand footprint
The South African rand accounted for an annual average of over 70 percent of total currency circulating across Eswatini, Lesotho and Namibia between 2019/20 and 2025/26. Because physical rand circulation cannot be directly tracked across borders, authorities rely on a joint model.
Base circulation levels set in 1974 and 1992 are updated assuming member cash growth exceeds South African growth by one-fifth, before subtracting domestic currency issuance.
Fair compensation, rigid arithmetic
The framework preserves regional equity in a currency union dominated by South Africa.
Yet tying payouts to 10-year yields and static formulas exposes smaller treasuries to external fiscal swings.
Relying on five-decade-old assumptions is no substitute for real-time digital transaction data.