One of the major attractions for investments in any country is the stability of its forex market. In this interview, the Business Head, Asset Management at Norrenberger Financial Group, Pabina Yinkere highlights why the Central Bank of Nigeria should intensify efforts to clear backlog of forex and ensure liquity in the market
With the forex unification and instability in the market, do you see it affecting investment opportunities in Nigeria?
For many years, the market has been calling for a reform of Nigeria’s Forex market that will engender liquidity and price discovery. A liquid and transparent Forex market is a key requirement for capital formation and economic growth in every economy. Sadly, in the last couple of years, Nigeria faced a major Forex crisis which stifled economic growth and dented investor confidence. On 8 June 2023, the CBN announced the collapsing of all Forex windows into NAFEM (previously NAFEX) with a removal of the hard peg on Naira trading within the official market, which led to a 40% weakening of the currency.
The development was initially cheered by markets as it underpinned strong investor expectations and led to the bull run in the Stock Market. However, the subsequent reality of low liquidity in the Forex market ignited a subsequent round of depreciation, extended the gap between the parallel and official rates and dented investor optimism. As long as this Forex uncertainty and overhang of unmet backlogs remain, investors will remain cautious about investing in Nigeria. While recent moves by the CBN to clear backlogs are welcome, we believe investors would like to see an improved level of Forex liquidity and positive market signalling to fully accept Nigeria as the alluring investment destination it once was.
How would you assess investment opportunities in Nigeria?
Nigeria remains a potential investment haven. The strong, youthful population and the diversified nature of our economy with various untapped natural resources make Nigeria an attractive economy cum investment opportunity. Many sectors within the country are in their infancy, suggesting that there is room for much growth. Nigeria’s per capita consumption of so many items underscores the huge investment potential there is. The Nigerian capital market is positioned to support this growth, but some hurdles need to be cleared to unlock this alluring potential.
How would you access the performance of Norrenberger financial group in the year 2023
2023 was a defining year for Norrenberger. In March, the Group announced the acquisition of a 60% stake in The Infrastructure Bank (TIB) to drive our development objectives. In September, we received the prestigious certification as a Great Place To Work (GPTW), validating the tenets of our core values, FIRST which are friendliness, innovation, responsiveness, simplicity and trust – values which are deeply embedded in the Norrenberger culture. In November, we successfully launched the Norrenberger Turbo Fund (NTF) – a fixed income fund to provide subscribers with competitive returns in the fixed income market. In December, to commemorate our 5th Anniversary, we launched the Norrenberger Entrepreneurship Fund (NEF) to empower aspiring young entrepreneurs, targeting youth corpers. During the year, we recorded impressive strides with the Norrenberger Dollar Fund (NDF) and the Norrenberger Islamic Fund (NIF) which were both among the fastest-growing mutual funds in the market. In terms of performance, our mutual funds ranked within the top quartile as some of the highest yielding in their respective categories. In all, we strengthened our position in the industry as a top 15 Mutual Fund Manager and our overall Assets Under Management (AUM) rose by 60% in 2023. This is a testament to our clients’ faith, trust and acceptance of the Norrenberger brand.
With strong competitors in the market, what have you done differently to cement your place in the financial space?
At Norrenberger, we have deliberately created investment options across various asset classes to ensure that we give our clients the best options to diversify their investments – whether we are talking about low-risk money market exposures, higher yielding fixed income investments, investment in stocks, alternative asset exposure or hedging against currency risk and inflation with foreign currency denominated investment options. We can create a portfolio that suits you with our array of competitive-yielding investment products.
How do you think Nigeria can boost the investment landscape and attract both domestic and foreign investments?
I believe the very first focus should be on establishing macroeconomic stability. The government needs to set a vision of the destination where it wants to take Nigeria, sell this vision to its citizenry, and communicate the short, medium and long-term imperatives to arriving at this destination. The high inflation and currency challenges must be addressed to stir investor confidence.
We need to see policy effectiveness and consistency, efficient allocation of capital across public and private sectors, well-enshrined governance at all levels, security of lives and property and development of human capital. Also, it doesn’t have to be perfect. Once we start ticking some of these boxes, you are bound to open up the economy and attract investments.
Norrenberger has a goal to create financial solutions for every household by 2025. How do you intend to achieve that?
Norrenberger has strategically diversified service offerings across various segments of the financial market and will continue to do so. Today, Norrenberger is an integrated financial services group that provides bespoke financial solutions that add value to our clients. With a team of experienced professionals, Norrenberger offers a comprehensive range of services, including asset management, private equity, development finance, investment banking, securities trading, pensions, insurance, fintech and digital banking. We are listening to our clients. What are their aspirations? What are their dreams? What are their needs? We use this to understand the Nigerian psyche when it comes to their financial needs. On the back of this, we then activate our ‘think tank’ to come up with solutions to meet these needs.
By Philip Shimnom Clement