PROGRESS REGARDING THE IMPLEMENTATION OF THE

Transcript:PROGRESS REGARDING THE IMPLEMENTATION OF THE:
PROGRESS REGARDING THE IMPLEMENTATION OF THE BLENDED FINANCE SCHEME PORTFOLIO COMMITTEE ON AGRICULTURE Date: 10 SEPTEMBER 2024 Presenter: Ms E Mtshiza CONFIDENTIAL 1 Acronyms AEF – Agro-Energy Fund BFS - Blended Finance Scheme CAPEX – Capital equipment and infrastructure fund Dalrrd - Department of Agriculture, Land Reform and Rural Development DFFE - Department of Forestry, Fisheries and Environment FNB – First National Bank MTEF – Medium Term Expenditure Framework SEFA - Small Enterprise Finance Agency SOC Limited “SEFA” CONFIDENTIAL 2 Purpose To provide the Portfolio Committee on Agriculture with the background and progress on the implementation of the Blended Finance Scheme CONFIDENTIAL 3 Problem Statement The National Development Plan (NDP) acknowledges that transforming the economy also means changing the patterns of ownership and control. To date efforts to transfer ownership of productive assets have not yielded the desired results with employee share scheme playing a less significant role. A bolder approach and clearer targets are required (NDP – Vision 2030). The agricultural sector remain dominated by white commercial producers who play a significant role in providing food, fibre, employment as well as ensuring foreign earnings from the sector. A number of factors constrain black producers from participating in the mainstream markets and value chain such as access to affordable finance, land, infrastructure, lack of collateral, inadequate skills and networks. 4 CONFIDENTIAL The Department of Agriculture, Land Reform and Rural Development “Dalrrd” embarked on a 5 week Operation Phakisa on Agriculture, Land Reform and Rural Development with key stakeholders in the sector in 2017 and among the 27 initiatives that were developed was Re-engineering of Agricultural Finance. This initiative advocated for the development of blended instruments were the state would provide a grant and leverage private funding in order to increase access to affordable finance for black producers. The blended funding would: unlock and enhance agricultural production of targeted producers through deliberate and well-defined interventions; drive the commercialization of black producers, increasing employment and exports and replacing imports; resulting in increase in GDP and economic growth. 5 Background and Introduction CONFIDENTIAL Background and Introduction (2) The Blended Finance Scheme was approved in 2018 with the proof of concept phase implemented through the Land Bank resulting in 7 transactions approved; and there were lessons learnt during this phase which led to the review of the concept. The improved Blended Finance Scheme “BFS” was re-launched by Minister Thoko Didiza on 18 March 2021