Agriculture wants the Budget to give clarity on Land Bank liquidity
DURBAN - THE AGRICULTURAL sector is hoping that Finance Minister Tito Mboweni will follow through on assisting the Land Bank with its liquidity challenges in the National Budget tomorrow.
The Agricultural Business Chamber's (Agbiz's) chief economist, Wandile Sihlobo, said yesterday that the sector would be closely watching to see if there would be any follow-through to assist the financier, especially in the context of t he country's fiscal constraints.
“It is a vital point that agricultural role players will most likely be watching the National Treasury's messaging about the Land Bank, which has been experiencing liquidity challenges for a while. In the Medium-Term Budget Policy Statement presented in October 2020, Finance Minister Tito Mboweni noted that the Land Bank would require an additional R7 billion over the medium term to support its restructuring,“ said Sihlobo.
Agbiz said the Land Bank was an essential institution in agricultural finance, interlinked with primary agriculture and various agribusinesses.
“Hence, any possible failures would potentially have broader implications on South Africa's agricultural sector and food security.” Agri SA head of economics Kulani Siweya said the balance between government income (tax revenue) and expenditure was at the heart of this year's government Budget.
“Rating agencies and financial market role players will want to see a commitment to fiscal consolidation. The fiscus is under severe strain and a further downgrade from credit agencies must be avoided at all cost.”