Big decisions ahead for new Land Bank CEO

Themba Rikhotso will become Land Bank CEO effective 1 April 2023.

The Land Bank said in a statement that Rikhotso held a BCom and a Master of Business Leadership, among other qualifications.

Rikhotso reportedly has 20 years of experience in the financial services sector, and extensive management experience in retail and corporate banking, alongside experience in funding agricultural projects across the continent.

Christo van der Rheede, CEO of Agri SA, said the appointment was a step in the right direction for the bank, which has been defaulting on its debt since 2020: “We wish Rikhotso all the best in this new task. It sounds as if he is well qualified and positioned to steer the bank onto a more positive course.”

Towards the end of last year, the bank announced it had finalised a strategy it believed would set the basis for a ‘future trajectory’ of the bank into a development finance institution that would meaningfully contribute to the transformation of the agriculture sector.

Van der Rheede said he hoped Rikhotso would not pursue this course at the cost of the commercial sector, as the commercial and development sectors were interdependent.

Francois Rossouw, CEO of the Southern African Agri Initiative (SAAI), said he could not get excited about the appointment until he knew what direction the bank was taking regarding its commercial loan book.

Farmer’s Weekly last year reported that the Land Bank had taken over the loan book of its intermediaries, such as agribusinesses and co-operatives, in an attempt to improve its financial position.

Rossouw said this had left a huge capital void and negatively affected relationships in the market: “The agribusinesses have a close relationship with farmers and the agricultural industry, so were well-equipped to help their clients manage these loans.

“The Land Bank, however, has lost a lot of expertise over the years and no longer has the capacity to manage these loans in the way in which the agribusinesses did.”

Noko Masipa, DA shadow minister of agriculture, said problems at the Land Bank in recent times were a result of the loan assets portfolio being entirely funded through short-term debt raised from the capital markets with no reserves, but succession planning was also a problem, as most of the CEO tenures were short and, in effect, disruptive towards business continuity.

“The new CEO comes at a time when investors have lost confidence in the business model of the Land Bank,” Masipa said.

He said the CEO would have to make stakeholders aware that the bank’s business model would have to change in order to improve its ability to raise capital and private investments.

However, even if the CEO managed to achieve these things, Masipa warned, expropriation of land without compensation would be the final nail in the bank’s coffin.