Deciphering Zaronia’s Governance Challenge: A Closer Look at the Spreadsheet Dilemma

The shift from Jibar (Johannesburg Interbank Average Rate) to Zaronia (South African Rand Overnight Index Average) in South Africa is seen by many market participants as a pivotal benchmark reform initiative. However, this perspective may not capture the full significance of the transition.

Jibar is set to be permanently discontinued following its final publication on 31 December 2026, with a “No new Jibar” milestone established for 1 May 2026 to prevent the formation of new Jibar-linked exposures ahead of its cessation.

For corporate issuers, this transition extends beyond just the interest rate referenced in financial instruments like loans, notes, or derivatives. It will challenge treasury operations’ ability to thrive in an environment where evidence, control, and auditability are as crucial as pricing.

Read: SA taps London to enhance adoption of new benchmark rate

The unsettling reality, which issuers need to take seriously, is that Zaronia will highlight the vulnerabilities of organizations reliant on spreadsheets, email inboxes, and the institutional memory of a few trusted individuals for critical debt management.

While these methods may have sufficed in an era of simpler benchmark conventions and predictable interest calculations, they become increasingly inadequate as the market evolves towards compounded overnight rates and heightened scrutiny from investors, lenders, auditors, and boards.

The governance challenge

The magnitude of the issue renders the governance concern impossible to overlook. At the MPG Conference 2025, Rashad Cassim estimated that domestic Jibar-linked exposure was around R43 trillion mid-2025, with offshore exposure exceeding R107 trillion.

He pointed out the acceleration in Zaronia adoption, which surged from R6.4 billion to over R200 billion, indicating that the transition is now a tangible reality.

This shift is already making its way through the financial system, and any weaknesses in the debt servicing operating model will be magnified.

Read:
Navigating money market funds amid declining interest rates
The transition from Jibar to Zaronia – methods and rationale

This is more than just a financial market detail; Jibar provided a forward-looking rate known at the beginning of an interest period.

Zaronia, in contrast, offers a backward-looking overnight rate based on actual transactions, as published by the South African Reserve Bank. While this benchmark may be more robust, it also imposes greater demands on the processes involved in each coupon, reset, notice, and payment.

The key question isn’t whether treasury teams can perform the calculations; most are capable of that.

Rather, the question is whether they can substantiate, under scrutiny, the data sources utilized, the individuals who verified the calculations, the approvals obtained, the timing of investor notifications, whether payment instructions aligned with the final outputs, and if the same results can be reproduced long after the settlement.

Leading organizations are already leveraging this transition to reevaluate their treasury operating frameworks. The discussions are increasingly expanding beyond benchmark reform to encompass governance, auditability, operational resilience, and control.

For many, the goal is not merely compliance with a new rate but fostering a scalable and defensible approach to debt management.

Ultimately, capital markets value more than just financial performance – they also price confidence. Confidence is bolstered by means of evidence, controls, and the assurance that obligations are administered consistently.

This risk is significant; in many firms, the same individuals are responsible for sourcing benchmark data, preparing calculations, validating outcomes, distributing notices, and initiating payment instructions. While this arrangement may seem familiar, it does not constitute strong governance.

When these processes are managed through spreadsheets, manual reconciliations, and email approvals, any oversight in controls is not merely an internal issue; it can escalate into a crisis of investor confidence.

This is the aspect of financial markets that warrants attention. Funding confidence is not established solely at the point of issuance, when deals are closed and pricing is disclosed; it is built through the often unseen diligence involved in accurately, transparently, and timely servicing debt.

South Africa’s debt markets are already cognizant of this principle. The local municipal debt sector serves as a potent reminder that accessibility to capital hinges on more than just assets and revenue streams.

Capabilities embedded into the operating model

Investors increasingly evaluate governance quality, operational capacity, and institutional credibility. Corporate issuers should not presume an exemption from this scrutiny. Deficient treasury governance breeds uncertainty, which inevitably influences pricing, investment appetite, and trust.

Read:
Standard Bank issues SA’s first Zaronia-linked bond
New benchmark aims to mitigate rate manipulation

There are broader insights to consider from global benchmark reforms. The transition away from Libor, which the Bank of England recorded was once referenced by over US$350 trillion in global financial instruments, was more than just a legal formalities adjustment.

It compelled institutions to address the quality of their data, systems, controls, and accountability. South Africa now finds itself in a similar implementation phase.

Viewing Zaronia as merely a compliance deadline would represent a misstep. The genuine opportunity lies in using this transition to enhance the operational framework that supports the funding program.

For issuers, this entails transcending legal fallback provisions and spreadsheet solutions.

This includes controlled benchmark data, independently verifiable calculations, defined separation between preparation, approval, and execution processes, automated audit trails, and robust governance overseeing each step from rate collection to investor communication and payment.

These enhancements are not just administrative; they are vital upgrades for market credibility.

Encouragingly, these capabilities no longer demand large institutional treasury teams. They can increasingly be integrated into the operating model through specialized governance, administration, and technology solutions.

Spreadsheets aren’t the enemy; they are indicators that some treasury operating models were crafted for a less stringent era. Zaronia will reveal these weaknesses.

Once the market navigates the transition mechanics, distinguished issuers will be those capable of demonstrating that their debt servicing is not only accurate but also controlled, repeatable, and defensible.

The positive takeaway is that these governance challenges are surmountable. Organizations that take proactive steps will be better positioned to bolster investor confidence, enhance operational resilience, and forge more scalable funding relationships.

In the South African market, where confidence increasingly dictates access to capital, governance has evolved beyond a mere administrative consideration to a strategic imperative.

Yushavia Ramlall is COO at Intengo Market.