South Africa’s land and agricultural development bank is likely to receive between R1.5 billion and R2 billion (about $92-122 million) from the National Treasury in a bailout plan.
According to sources close to the matter cited by Bloomberg, the new disbursement is part of a vast plan to provide financial support to struggling public enterprises such as South African Airways and Denel, the defense equipment manufacturer. As a reminder, the Treasury approved R3 billion ($185 million) to Land Bank in FY 2020-21.
Although this helping hand from the government is crucial for the agricultural sector, it may not be sufficient to ensure a real takeoff of the industry. Earlier this month, Land Bank said it expects the support of R10 billion rand by 2024 both in the form of capital injections and government guarantees, including 7 billion rand in 2021/2022.
“The companies have been told to try and seek private equity partners for further funding,” Bloomberg sources said.
As a reminder, the agricultural sector sustains more than 8 million people directly and indirectly in South Africa.