South Africa: Mboweni Comes to the Land Bank's Rescue (Again)

analysis

The Land Bank was the only state-owned enterprise that was awarded a bailout by Mboweni to avert the collapse of a lender that provides 27% of SA's agricultural debt.

Finance Minister Tito Mboweni has a soft spot for the Land Bank and is sympathetic when it comes to the state-owned lender's demands.

Mboweni recently said that the Land Bank - like Eskom - was "too big to fail", pointing to the company being a substantial lender to SA's agricultural industry and that it must be protected and supported by the government at all cost.

The Land Bank's operations are tied to SA's food security system. In addition to offering loans to emerging and established farmers, the Land Bank also offers farmer insurance products for agricultural-related events such as a drought.

The Land Bank was the only state-owned enterprise that was awarded a bailout by Mboweni in the 2021 Budget Review to avert the collapse of a lender that provides 27% of SA's agricultural debt. The Land Bank stands to receive a R7-billion bailout over the next three years, of which the National Treasury said would "put it [the bank] on a stable and sustainable development...

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