South Africa’s agric sector gets $117m AfDB credit

The African Development Bank (AfDB) is giving the Land and Agricultural Development Bank of South Africa a $117 million sovereign guaranteed line of credit (LoC) to aid the country’s emerging farmers, commercial farmers as well as agricultural cooperatives and agri-related businesses.

The credit was approved by the Bank’s Board of Directors on June 20, 2012

The AfDB believes that the support will help to mobilize financial resources for South Africa’s agric sector which will ultimately contributing to job creation and income generation.

The credit includes a technical assistance component for capacity building at Land Bank and at the level of its loan beneficiaries, particularly the emerging farmers, the AfDB said in a statement.

Commenting on the transaction, AfDB’s Private Sector and Micro-finance Department Director, Tim Turner, said “The LoC from the AfDB will be dedicated to the agricultural sector which is generally labor-intensive and its benefits are expected to emphasize low-skilled workers, especially with Land Bank’s focus on emerging farmers.”

He said that the projected 2,700 loans to be given to emerging farmers from the LoC are expected to generate some 14,000 jobs while the financing to the commercial farmers, cooperatives and agri-related businesses is expected to create at least 2,000 jobs.

Primary agricultural sector contributes about 3% to South Africa’s gross domestic product (GDP), the Bank says.

By Ekow Quandzie