The Land Bank’s long trek out of default
Things are looking up for the bank after its 2020 debt default. But a return to developmental rather than commercial finance brings increased risk and will require additional state funding
News of the Land Bank’s R50bn debt default reached the markets just as Covid reared its head in March 2020. It was a delicate period around the world and — unbeknown to many — the start of large-scale disruptions to the world’s supply chains. Food value chains were about to be stretched to their limits. It was a bad time, in other words, for an agricultural lender to find its borrowing and lending activities curtailed.
Fast-forward 2½ years, and the 110-year-old institution has yet to cure the default. The Treasury has the money to effect the remedy; it set the funds aside in the February 2021 budget. But, according to the October medium-term budget policy statement, not all the conditions for the release of R5bn in funds have been met...
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