Gilbert Ekugbe
The government of Norway through the Norwegian Investment Fund (Norfund), has disclosed plan to upgrade an existing cocoa processing facility in Ibadan.
The move, according to Norfund, would bring the 20,000 metric tonnes annual capacity cocoa processing plant up to full operations while also creating job opportunities for the nation’s teeming unemployed youths.
At a virtual press conference to highlight Norfund’s future investment plans in Nigeria, the Investment Manager, Norfund, Obafemi Awobokun, said despite Nigeria being one of the top five countries in Africa in terms of cocoa production, it was yet to benefit from the gains of the global cocoa industry.
In his words: “The facility has been existing for many years which does about 20,000 metric tonnes of cocoa processing yearly, but has not been living up to full capacity for quite some time. Our investment will then go towards upgrading the facility and getting people back their jobs and eventually they would also go towards confectionery such as ready to drink milk, chocolates and the likes.”
According to him, it is unfortunate that a lot of cocoa processors do not prioritise value add services in cocoa processing, noting that there are huge margins and employment opportunities that could spring up from value add services in cocoa processing.
“This means countries like Nigeria do not really benefit from the large cocoa industry globally, because we do more of cocoa beans and exporting as opposed to more manufacturing. In addition to upgrading the facility in Ibadan, we also want to do more value add production to get more margins and create more job opportunities,” he added.
“Our investment is aimed at creating more value in origin cocoa producing countries such as Nigeria and encouraging similar investors to see as Nigeria as a strategic investment destination, but even the agric industry as well,” he stressed.
Also speaking, the Regional Director West Africa, Norfund, Naana Winful Fynn, said till date, Norfund has invested over $132 million and $535 million in Nigeria and across West Africa respectively.
She said the Norwegian government was upbeat about investing in Nigeria despite the harsh operating environment, adding that the source of its capital allows for long-term investment.
“It has been a very difficult few years from the Nigeria’s standpoint and the companies we have invested in and many of the companies we speak with. The source of our capital allows us to take a long term view on investments.
“Our capital is from the Norwegian government. What we are doing is taking risks alongside the other shareholders in the business,” she said.
She added: “Even though the challenges Nigeria has faced in the last few years, we have continued to invest in the country and the reason for that is that as a Development Finance Institution (DFI) we believe in investing in both the good and the bad times and also a partner for challenging times.”
She, however, stated that Norfund was excited to observe the changes taken by the present administration which she described as a positive change. She said the move would address some of the issues many investors have grappled with investing in the country.
“From Nigeria’s standpoint including the currency issue not just from the exchange standpoint which seem to be narrowing, there has been a devaluation expected by most of the markets and the fuel subsidy which is extremely costly from a fiscal standpoint. “These are changes that are painful in the short term, but which I think from a long term perspective would make it easier for the country to attract other institutional investors,” she averred.
“We really like to do more in Nigeria across all our investment centres. We are very much looking to deliver on our mandate of partnering with great management teams to support their financial and other needs. Nigeria is an extremely important market as we continue to build our West Africa businesses and portfolio,” she assured.
