The unified exchange policy is already yielding positive investment results.
Norfund – the Norwegian Investment Fund for developing countries — is set to invest $12 million in the agricultural sector.
West Africa Regional Director, Naana Winful Fynn, said more capital should be expected with the fear of naira devaluation gone and complexities around multiple exchange rates resolved.
She spoke yesterday during a virtual media parley in Lagos.
Fynn said through an investment of $12 million in OH Ecosystems Ltd, Norfund aims to create jobs and contribute towards addressing some of the challenges in the cocoa value chain.
She said the cocoa sector is very important for Nigeria and West Africa and could be key in the push to diversify Nigeria’s revenue sources.
Fynn said foreign investors held back by macroeconomic challenges, including multiple exchange rates, no longer see naira devaluation fear as a challenge in investing in the economy.
She said currency risks in the calculation of foreign investors have been removed by ongoing reforms in the forex market, including the collapse of multiple exchange rates into the Investors and Exporters (I&E) window by the Central Bank of Nigeria (CBN).
After the inauguration of President Bola Ahmed Tinubu, a series of bold reforms many considered long overdue, including subsidy removal, “housecleaning” at critical institutions and exchange rate unification, are being implemented.
Fynn said implementation of these reforms will continue to build investors’ confidence and attract more capital to the economy.
On the investment, she said: “By partnering with this management team, which has deep sector experience in West Africa, a strong technical partner, local investors and current owners, we aim to contribute positively to this effort.
“This investment also presents us the opportunity to partner with these stakeholders to increase local processing of cocoa beans and thus capture more of the value chain dollars at origin, to create jobs and to positively impact the fight against child and forced labour and deforestation in this important value chain.”
Norfund’s investment will upgrade FTN’s operating facilities and extend its reach to produce and sell additional products into the cocoa supply chain.
Eco is supported by established leaders in the global cocoa chain, including Niche Cocoa Industry Ltd – Africa’s largest indigenous cocoa processor, who will serve as a technical partner.
Investment Manager at Norfund, Obafemi Awobokun, said: “Increasing the share of raw materials that are processed locally can create a large number of jobs that give the fast-growing population of Nigeria the opportunity to work their way out of poverty.
“We are confident that this investment can contribute to this.”
Norfund’s investment is expected to help create both technical and non-technical employment directly for 600 people and indirectly for more than 1,500 across the cocoa value chain.
The investment also contributes towards the government’s efforts to diversify export revenues by reducing its reliance on oil and gas.
The cocoa sector faces challenges related to working conditions and the use of child labour, as well as environmental concerns.
Norfund said it is committed to supporting companies that seek to operate in a sustainable manner, in sectors with challenging dynamics.
As part of the partnership, Norfund will support Eco’s efforts in establishing a sustainable supply chain through its farmer empowerment programme dubbed ‘EcoWise’.
The programme seeks to address farmer poverty, which is one of the root causes of child and forced labour in the cocoa value chain.
