Junk status: Land Bank latest casualty of ANC governance failures
22 January 2020
The Democratic Alliance (DA) is not surprised by Moody’s decision to downgrade the Land Bank’s long-term issuer ratings to Ba1a, making it the first big State-Owned Enterprise (SOE) in South Africa to be relegated to junk status by the New York-based rating agency. Instead of being a vehicle for existing and emerging farmers to get the support that they need to ensure sustainability, the Land Bank has just become the latest casualty in the ANC’s continuous governance failures at critical SOEs.
The Land Bank’s downgrade should send a strong message to the ANC Government, that if we do not make difficult choices in the interest of the people and the economy, we will not fix the economy.
During his State of the Nation Address on 20 June 2019, President Cyril Ramaphosa stated that Government allocated R3.9 billion to the Land Bank in the 2019-20 medium-term budget. In the interest of accountability, the DA submitted a Parliamentary Question to the Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, to ask how this funding would be budgeted; whether the funding would be allocated for land reform projects and farms; and whether performance measures are in place to monitor the implementation and success of each programme that receives a budget allocation.
The Minister is yet to respond to these pertinent questions and in light of this catastrophic downgrade to junk, we need urgent updates on whether any of the R3.9 billion was in fact injected into the Bank and whether it has been properly spent on the designated programmes.
President Ramaphosa’s SONA promise, of an “agricultural revolution” that will empower the South African people to work the land effectively, will prove to be one of his many broken promises, as the very entity mandated with financing agricultural development, transforming the agricultural sector, maintaining food security, and has been dealt a massive blow.
The DA will be writing to the chairperson of the agriculture, land reform and rural development committee, Mr. Mandela, to request an urgent meeting with the Land Bank and Minister Didiza. We cannot let this important entity fail.
Government must own up to the fact that the downgrade of the Land Bank is not due to the strains placed on the entity by the ongoing drought, but is indicative of their failures to see ahead of the curve, the failures in governance and continued redirecting of funds meant for emerging farmers to fill pockets of the political connected.
Issued by Annette Steyn, DA Shadow Minister of Agriculture, Land Reform and Rural Development, 22 January 2020