Treasury on Wednesday said its inability to give the Land Bank the R20 billion it had asked for was not a sign of the government’s lack of commitment to the state-owned bank.
The bank’s in dire financial straits and defaulted on repaying R50 billion in loans in April.
Although once profitable, a range of factors, including a downgrade to junk status by Moody’s, have led to the Land Bank now being unable to access credit or make any loans.
The Land Bank’s financial troubles were laid bare at a meeting of Parliament’s standing committee on appropriations on Wednesday.
Treasury official Tshepiso Moahloli said the bank asked for the R22 billion just before the COVID-19 crisis hit, and Treasury needed to first interrogate what the problems at the bank were.
“I can at this point assure the committee and the honourable members, that where we are is not a sign of a lack of commitment from the fiscus or even from the government.”
The bank is currently in talks with lenders, in a bid to restructure its debt. Moahloli said Treasury was closely involved.
“While the events are unfortunate, they don’t in any way suggest that the Land Bank is unimportant – and that is why Treasury has been actively participating in the process… around addressing the liquidity challenge of the Land Bank, around dealing with the curing of defaults – but most importantly – of ensuring the long-term sustainability of the Land Bank.”