Afinitas, an Africa focused investment company listed on the Botswana Stock Exchange, has approved $2.5m to establish an Ethiopia focused holding company and fund its investments.

This new entity will be the second subsidiary in Afinitas Limited and will have an investment mandate focused on seeding new investments in the country or investing in existing projects.

Leutlwetse Tumelo, Executive Director of Afinitas, said: "Our investment strategy is to invest in targeted sectors/countries by either providing the seed capital for a new company or invest in an operating entity."

"Our first subsidiary is Africa Events Limited, which was established for strategic reason to support the development of Afinitas Limited," he told AGF.

It is anticipated that the new entity will be incorporated in Mauritius and will own investments directly in Ethiopia.

A management team based in Addis Ababa, Ethiopia, has already been appointed and they have built a pipeline of potential investments for the new entity.

Some of the priority investments identified to date are in the following sectors: agriculture, leasing, manufacturing and services.

Ethiopia is ranked by the International Monetary Fund as one of the top five fastest growing economies in the world.

Over the 10 years between 2004 and 2014, Ethiopia’s GDP growth averaged 10.8% per annum which is higher than the average for sub Saharan over the same period.

It is anticipated that Ethiopia will continue to enjoy strong growth rates underpinned by the Government’s implementation of the second Growth and Transformation Plan.

"Ethiopia is a unique investment destination in Africa. The country has a large and rapidly modernising population that is developing into a significant domestic market for goods and services produced in the country," said Afinitas.