State-owned agriculture financier, Agribank, has started searching for a strategic partner after securing a transaction advisor, a move that is expected to pave way for fresh capital injection in the near future.
The turnaround of Agribank which has seen it recording a 63 percent growth in profit after tax for 2018 has also created an opportunity for increased farming sector funding schemes.
While the government as the majority shareholder has lined up the institution for partial privatisation, it is the recent appointment of a transaction advisor that has set the tone for securing a strategic partner, according to the bank’s Chief Executive Officer Mr Sam Malaba.
“The possibilities of access to funding for farmers are still more than imminent. However, it is the need to ensure that we mobilise as much as we can for the benefit of key investors in the near future,” he said.
With the floating of agro-bills raising $86 million since 2013, the process will continue to be undertaken by the bank in line with the government’s vision towards increasing the farming sector output.
“The sustainability of the industry is a key priority that needs to be given maximum attention as we seek to enhance the value of produce for the farmers while also taking into account the needs of the agriculture sector,” Mr Malaba said.
The Industrial Development Corporation of South Africa, Afreximbank, African Development Bank and the PTA Bank are also in talks with the state-owned agricultural development financier over foreign lines of credit to support the farming industry.