Afinitas executive director, Leutlwetse Tumelo told BusinessWeek that his company is an Africa-focused investment company, noting that creating an Ethiopia-focused holding company falls within their objective of investing in various sectors and countries across the continent.
“The motivation for going into Ethiopia is in part underpinned by the rapidly changing investment climate in that country,” he said.
Tumelo stated that the Ethiopian government is focused on attracting long-term private sector investment into the country, adding that for more than a decade now Ethiopia has enjoyed one of the fastest gross domestic product (GDP) growth rates in the world, on average about 10 percent.
He said Ethiopia was not significantly affected by the effects of the global financial crises and that because it is not a mineral dependent economy it is insulated from the current global downturn in commodity prices.
“Ethiopia therefore provides good diversification from the resource driven economies in Africa,” Tumelo said.
According to Tumelo, Ethiopia offers a large and rapidly modernising population, estimated at 97 million people. He said this represents a large domestic market for goods and services produced in the country.
He noted that economic projections indicate the country will continue to enjoy strong economic growth rates. “From the perspective of Afinitas we believe that the forecast economic growth rate, growing population and the positively changing investment environment has created many investment opportunities,” he said.
Tumelo said they will now be actively working to conclude a number of the potential investments that they have identified. The new entity in Ethiopia 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. It is anticipated that the new entity will be incorporated in Mauritius and will own investments directly in Ethiopia, which is the second most populous nation in Africa.
According to the statement, 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.
It said some of the priority investments identified to date are in the sectors of agriculture, leasing, manufacturing and services.
“The team will now focus on concluding these investments. Shareholder approval will be sought where required in compliance with the Botswana Stock Exchange (BSE) listing requirements,” the company stated.
It further stated that the company will publish details of these investments at the appropriate time and keep shareholders regularly informed on progress.
Last year, Afinitas indicated that it is targeting Africa as an investment destination, noting that the continent’s strong economic growth forecast is encouraging.
Following the listing of Afinitas on the Botswana Stock Exchange (BSE) in July last year, a new company, Africa Events Limited was incorporated and registered in Jersey, the largest of the Channel Islands, on July 31, 2015.
Afinitas also acquired a 50 percent stake in the London-held annual Africa Financial Services Investment Conference (AFSIC).
Apart from AFSIC, the company stated that it eyes to make various other investments ranging between $2 million and $4 million in industries such as financial services, insurance companies, leasing companies, fund management companies, deposit- companies and lending companies.