South Africa: Mboweni Starves Most SOEs of Additional Funding to 'Close the Hippo's Mouth'

A South African Treasury graphic to illustrate the June 24 Supplementary Budget.
analysis

Finance Minister Tito Mboweni has a soft spot for the Land Bank, a state-owned specialist lender to commercial and emerging farmers. He has thrown the Land Bank a R3-billion lifeline, but made no additional funding for other SOEs.

Since government implemented a lockdown at the end of March 2020 to stop the spread of Covid-19, financially distressed state-owned entities (SOEs) including SAA, SA Express, the Land Bank, and the Airports Company SA have sought urgent assistance from the public purse.

But Tito Mboweni, who is under pressure to stabilise rising government spending and smother debt levels that will burden future generations, is only willing to entertain a funding request by the Land Bank.

In his supplementary Budget speech on Wednesday, 24 June 2020, Mboweni has thrown a R3-billion financial lifeline to the Land Bank because, like Eskom, the SOE is too big to fail.

This is because the Land Bank loans money to emerging and established farmers, and provides 28% of SA's agricultural debt. It's funding to farmers is crucial to keep their agricultural operations going while maintaining SA's food security, especially during the pandemic.

In recent months, the Land Bank has become another basket case, missing...

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