Africa-Press – South-Africa. South Africa’s Land and Agricultural Development Bank has received R10 billion in capital injections over the past five financial years.
This state-owned enterprise (SOE) has achieved one clean audit outcome between the 2019/20 and 2023/24 financial years.
In response to a recent Parliamentary question from DA MP Jan Naudé de Villiers, Finance Minister Enoch Godongwana revealed that the Land Bank has received billions in capital injections in the past five financial years.
De Villiers had asked the minister which of the entities that report to him have received bailouts, guarantees or capital injections over the past five fiscal years.
The minister revealed that the Land Bank had received a total of R10 billion between 2020 and 2024.
This total was spread across four years, with R3 billion in 2020, R5 billion in 2021, R1 billion in 2022, and R1 billion in 2023.
Established in 1912, the Land Bank is an agricultural bank that offers specially designed financial services to serve South Africa’s commercial and emerging farmers.
These services help farmers finance land and equipment, improve assets, and obtain production credit. It is overseen by the National Treasury.
Between the 2019/20 and 2023/24 financial years, the Land Bank’s financial performance has been mixed.
In 2019/20 and 2020/21, it recorded significant deficits of R905.1 million and R747.74 million, respectively.
However, it swung back into a surplus the next year, with R1.26 billion reported for 2021/22, the same year it received a R5 billion capital injection.
This surplus diminished the following two years, with the Land Bank reporting a surplus of R515.42 million for 2022/23 and R21.36 million for 2023/24.
Across all five of these years, the Land Bank only received a clean audit in 2021/22. The SOE received the following audit opinions in each year –
2019/20 – Disclaimer
2020/21 – Qualified
2021/22 – Clean audit
2022/23 – Financially unqualified
2023/24 – Financially unqualified
In his response to the Parliamentary question, Godongwana noted that the Land Bank has not paid performance-based or other bonuses to its CEO or accounting officers since 2020.
Improvements at the Land Bank
Finance Minister Enoch Godongwana
The Land Bank suffered a massive setback in 2020 when it defaulted on its loan repayments. This threatened the bank’s sustainability and forced it to halt lending.
The bank’s chairman, Rethabile Nkosi, attributed this to a “misalignment” between the SOE’s funding structure, operating model and mandate.
In response to this setback, the Land Bank’s board approved a new five-year strategy in 2022 to halt its post-default decline and rebuild the business as an effective and sustainable institution.
That same year, the bank resumed lending activities, and 2024 marked its first full financial year. In 2024, the Land Bank provided R358 million in loans and R365 million in grants.
This totals R723 million in finance facilities, far below its target of R1.48 billion in loans and grant disbursements.
In the Land Bank’s annual report for the 2024 financial year, Godongwana commended the SOE for its financial discipline.
In this year, the bank reported a profit of R21 million and decreased its non-performing loan (NPL) book from R9.7 billion in the 2023 financial year to R9.3 billion.
However, the minister noted that the Land Bank’s NPL ratio had increased from 51.9% to 53.2% due to a decrease in its gross loan book.
Regardless, Godongwana said the Land Bank’s turnaround reached a significant milestone with the conclusion of its debt restructuring process, which ended the bank’s state of default.
The minister said this will allow the bank to start pursuing potential alternative sources of funds.
He added that the process to conclude the bank’s Liability Solution has been supported by the National Treasury, which allocated a portion of the R7 billion budgeted for the Land Bank from 2021/22 to 2023/24 to repay its remaining guaranteed debt during the 2024 financial year.
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