South African Reserve Bank governor Gill Marcus and senior executives are to forego pay increases for the next year, in response to President Jacob Zuma’s call for executives to help stabilise the economy.

The Reserve Bank announced the decision to freeze salaries following a board meeting held recently, revealing that the Governor Gill Marcus, her three Deputy Governors Francois Groepe, Lesetja Kganyago and Daniel Mminele, and all executive and non-executive directors had agreed to waive salary and fee increases for 2013; citing the “prevailing economic climate locally and globally” as the reason for the freeze.

“This is in support of President Zuma’s call to CEOs and executive directors in the private and public sectors, to agree to a freeze on increases in salaries and bonuses over the next 12 months,” the Bank announced.

President Zuma in October called upon all senior executives to agree a salary freeze for the next 12 months in an effort to stimulate the South African economy, which had been severely hit on many levels by labour unrest over the second half of 2012, as well as by the fragile state of global economies.

South African industries were hit by a wave of strikes over the later period of 2012, as the country’s labour force demanded substantial wage increases, with the mining sector leading the actions demanding that employers match the up to 22 per cent increases in pay packages in line with the infamous deal struck between workers and employers at Lonmin platinum producer; soon copied by workers across a range of industry sectors, bringing the country’s economy to a halt.

The Reserve Bank was among the voices cautioning against the large wage increases, flagging the potential impact of such big increases to wage bills for producers already struggling against a difficult financial climate.

Furthermore, as financial woes plague global economies, South Africa has seen demand for various of its export products dwindle, putting further pressure on the economy.

It is in this context that President Zuma in October stated that senior executives across the country should lead the way in building the economy – prompting the current response from the Reserve Bank senior management.

The Bank noted that the salary freeze would not apply to staff and general management.