The National Treasury appeared before the Standing Committee on Finance to update the committee on an amendment to Section 45 of the Land Bank Act and the implications for business operations and budget allocations.
Deputy Minister of Finance Dr David Masondo explained that the amendment re-structures the bank with the goal of re-establishing it as an effective and efficient development finance institution that can contribute towards the growth and the transformation of the South African agricultural sector.
The Land Bank must prioritise its developmental impact and improve its support for emerging farmers, particularly black farmers in the agricultural sector, he stressed. This can be achieved if the bank works closely with the Department of Agriculture, Land Reform and Rural Development, the Deputy Minister said.
However, before this happens the bank needs to address its debt problem, Dr Masondo noted. This debt arose due to the bank’s poor financial management, which has impacted on its liquidity and resulted in defaults on its debt obligations as far back as 1 April 2020. The government believes that these challenges should be remitted so that the bank can return to full operations as soon as possible.
To this end, over the last three years, the Land Bank has worked with lenders to find possible solutions. However, due to the complexity of the bank’s structure and the large number of lenders to which the bank is indebted, a solution that enjoys the consensus of all its lenders has not been found as yet. As a result, National Treasury continues to support the bank in its debt restructuring process and is working with affected entities to ensure that it continues to pay them.
National Treasury is also providing fiscal support to the bank to the tune of R10 billion. Three billion rand of this was transferred in 2020; this assisted the bank to continue paying interest on all outstanding debts, to begin repaying the capital on its outstanding debt and to undertake limited disbursement on its performing clients.
The Land Bank’s former non-executive Chairperson, Ms Thabi Nkosi, added that the bank’s turnaround strategy includes measures to enhance food security, It also want to ensure that its support for emerging farmers has a positive impact on the bank’s developmental trajectory. This will help South Africa to build a more sustainable and inclusive agricultural sector, she maintained.
This strategy is starting to see some green shoots. In the 2025/26 financial year, the bank reported profit of just under R12 million. Ms Nkosi said that under the new board, the bank is in a healthy cash position, notwithstanding its ongoing liquidity challenges.
Committee member Mr Ashor Sarupen asked when the bank expected to complete its debt restructuring process. Ms Nkosi replied that initially this was set for 30 September 2026, but unfortunately “we did have some challenges with a few lenders on some points in relation to the debt restructuring agreements that we were working on”. The Land Bank wants the process to be complete by the end of this financial year.
Mr Sarupen also asked about staff retention plans, as the bank it struggling to retain staff. Ms Nkosi replied that beyond salaries, broader issues around working conditions, employee value propositions in relation to their development opportunities and where they see themselves in future in the organisation are being discussed with staff to curtail staff turn-over.
The committee Chairperson, Dr Joseph Maswanganyi, reminded the meeting of the committee’s previous oversight visits to the Land Bank. Thereafter and emanating from observations made during these previous visits, the committee adopted a report with recommendations to guide the amendment that is being sought by the National Treasury.
Accordingly, he said, the committee is of the view that the current negotiations on the liability solution should be finalised during this financial year in order to enable the bank to resume with its lending activities.
Regarding staffing challenges, the committee recommend that the bank review its policy of outsourcing work that could be performed by Land Bank’s own employees. Dr Maswanganyi also emphasised once again the bank’s important role in ensuring the transformation and development of black farmers and establishing food security.
Abel Mputing
20 October 2026
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