BUSINESS MAVERICK: Mboweni starves most SOEs of additional funding to ‘close the hippo’s mouth’

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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 including SAA, SA Express, the Land Bank, and the Airports Company SA have sought urgent assistance from the public purse.

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. But Mboweni has come to the Land Bank’s rescue, allocating a R3-billion equity investment to recapitalise the company. The allocated money is in line with the Land Bank’s emergency funding request from the government to fund its operational expenses, disburse already approved loans to farmers and pay lenders outstanding money.

 

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