Maktech Founder and Executive Director Godwin Makyao aims to inspire a new generation of Tanzanian and African entrepreneurs as he looks to expand his portfolio with further investment in East Africa’s tourism and conservation sector.
Escarpment Luxury Lodge
Mr Makyao opened Escarpment Luxury Lodge and Safari in Tanzania’s stunning Lake Manyara National Park in 2011. After enjoying success in the telecommunications industry, Mr Makyao’s investment into the tourism sector was primarily driven out of love for his native Tanzania and a desire to contribute to the conservation of the Lake Manyara area and its wildlife.
“I set up Escarpment Lodge to diversify my business” explains Mr Makyao.
“Back in 2010, three industries stood head and shoulders above the rest in Tanzania. These were mining, tourism, and telecommunications. I was already in the telecom industry, and mining was not an option for me, so tourism became the obvious go-to. The fact that 90 per cent of investors in the sector were foreign bothered me. It baffled me that locals had not even looked into it, especially in the high potential Kilimanjaro area. I took the chance because I knew I could leverage my knowledge of the place and the culture.
“Penetrating the market took quite some doing for us. The tourism industry is vastly different from the telecommunication industry, especially since demand fluctuates. The first four years were challenging, but things are looking up now after quite a steep learning curve.
“Setting up a tourism venture like mine demands being environmentally conscious. Sustainability is on the minds of all investors in this industry. The government is also cognizant of this and has set up very stringent anti-poaching and anti-pollution measures. I have set up my business with future generations in mind. I want to ensure that they get to enjoy the scenic beauty of Tanzania by conserving the environment today.”
Visitors to Escarpment Luxury Lodge and Safari can watch wildlife from the comfort and luxury of the infinity pool
Lake Manyara National Park sits in the Arusha and Manyara regions in the north of Tanzania. It is ideally located for visitors also looking to see the crown jewels of the Tanzanian tourism industry; Serengeti National Park and Mount Kilimanjaro.
Escarpment Luxury Lodge also ideally placed to cater for “bleisure” tourists who combine business with pleasure, given that Tanzania, and the city of Arusha in particular, is developing as a hub for the meetings and events industry.
Stylish interiors have helped the lodge be recognised as a world leader in luxury tourism
Despite having no personal experience in tourism until Escarpment opened its doors, Mr Makyao and his team have successfully developed the lodge over the past nine years with the last three years, in particular, seeing visitor numbers grow. In 2019, the Escarpment team were rewarded by winning the Global Award of the Luxury Lodge category at the World Luxury Hotel Awards.
Escarpment’s contribution to Tanzania goes beyond business and its economic value to the Lake Manyara community. Tourism has a significant impact on conservation efforts on the African continent, with governments aware that without continued investment in environmental conservation, the tremendous growth enjoyed by the tourism industry would be quickly reversed.
Tanzania’s tourism industry has grown by 300% over the past decade, attracting more than 1 million visitors annually with the majority coming for wildlife safaris. It is this opportunity for growth, combined with the conservation of Tanzania’s wildlife, that Godwin Makyao and the Escarpment team are now ready to develop further through partnership with local and international investors.
Furthermore, having built successful business models in both telecommunications and tourism, Mr Makyao now actively looks to inspire a new generation of entrepreneurs to continue the sustainable and responsible development of Tanzania.
Building Tanzania’s Telecommunications Powerhouse
Mr Makyao’s wealth comes from his pioneering work in developing Tanzania’s telecommunications infrastructure through Maktech, a company he founded in 2001.
Maktech builds the necessary infrastructure for mobile operators to work in East African markets, and work with the major players of the African telecommunications industry, including Huawei and MTN.
Maktech is a great Tanzanian entrepreneurial success story, particularly as the company was built with limited access to capital. Mr Makyao attributes the successful development of the company to proper planning and execution of a strategy to enter a completely underserved market in need of telecommunications infrastructure.
The company now intends to leverage off of the relationships built over the last eighteen years to expand into new markets, positioning itself as a driver of African development through ICT infrastructure roll-out. Mr Makyao explains “We have working relationships with Nokia, Vodacom, Huawei, Airtel, and MTN. These big-name corporations see our collaboration as an opportunity to venture into more African markets.
“The work we do will lay the groundwork for these big players to come and invest. The last eighteen years have cemented our profile as a powerhouse in Tanzania. Seven years ago, we launched our Mozambique office, and we are now staring at Zambia, DRC, Ethiopia, Madagascar, and Botswana. Our aim is not solely to make money from the countries we expand into but to add to the culture. These countries will reap significant benefits if we facilitate the penetration of ICT much quicker.”
Unleashing Africa’s Entrepreneurial Potential
The rapid improvement in Africa’s digital infrastructure has opened up entrepreneurial opportunity across the continent. From smallholder farmers to emerging start-up hubs in Cape Town and Nairobi, every segment of African business has been positively impacted by the digital communications revolution.
In spite of this, developing successful entrepreneurs at scale remains the critical challenge for African economic growth.
Across the continent, the statistics show both how reliant African economies are on small and medium enterprises (SMEs) and the challenges that entrepreneurs face in developing job-creating businesses.
SMEs are estimated to be responsible for over 80% of employment in Africa. Small companies account for more than 60% of the continent’s business-to-business spending, and over 80% in Nigeria, Kenya, Tanzania, and Ethiopia.
However, many parts of the continent have the highest failure rates in the world for new businesses. 46% of new companies launched in Kenya and 71% of new companies launched in South Africa will have closed within their first year.
For those who do survive, scaling up is challenging. Only about 1% of micro-enterprises that have started with less than five employees have grown to employ ten people or more.
Access to capital is a significant challenge for African entrepreneurs and small business owners, with Africa’s SMEs facing a credit gap of $135 billion.
However, the challenges in developing successful homegrown African businesses go beyond access to capital, a point that Mr Makayao is keen to stress to Tanzania’s emerging business owners.
Indeed, the development of Maktech from a position of limited start-up capital demonstrates that capital is only part of the winning formula for African business development. Despite initial challenges, Maktech grew from employing just four people in 2003 to over 180 in 2019.
Mr Makyao sees identifying opportunity within the many barriers to doing business in Africa as the key to entrepreneurial success, as he explained in an interview with AfricaLive; “Africa presents more opportunities than risks.
“If you consider that we still have hundreds of millions of people barely getting mobile services, then you can see the opportunity. The size of the potential African market, coupled with the saturation of markets across the globe, should have investors sold.
“The local entrepreneur must do proper research on what they want to do. If you ask a lot of budding entrepreneurs what they need to get started, they will mostly say capital.
“That’s not the best way to think about it because their main concern should be problem-solving.
“Before they start their venture, they must identify markets for their products. Success belongs to those who do proper research and have a solid business plan, not just to those who have the money. A lack of a problem-solving mentality encourages duplication of ideas. That’s how we end up with ten shops selling the same items on the same street.”
Inspiring growth in a new generation of African entrepreneurs is a central part of Maktech’s identity as it prepares for further growth in new African markets. In addition to working with network operators and telecommunications equipment vendors, Maktech is expanding into network operation centre management and ICT services for banks, airlines and security companies. The company intends to own its own Network Operations Centre and achieved an annual turnover of $24m by 2024.
The impact of developing digital infrastructure in Africa is significant. By some estimates, a 10% increase in broadband penetration in low- and middle-income countries can result in a 1.38% increase in economic growth. At Maktech, Mr Makyao’s vision is to both build the necessary digital infrastructure for growth and inspire a new generation of problem-solving African entrepreneurs ready to take advantage of the opportunities of a fully connected digital world.
A Call to Action to Grow East African Tourism
While telecommunications infrastructure roll-out has positively impacted upon all sectors of business in Africa, it is in the tourism sector that Mr Makyao has taken a hands-on approach to investment.
Following the successful development of Escarpment Luxury Lodge, further investment is on the horizon. Mr Makyao is actively looking for partners with the ability to develop similar luxury lodges that positively impact on conservation initiatives in East Africa.
A guest enjoying the luxury offering at Escarpment while viewing wildlife
The numbers show that investment in East African tourism remains an attractive proposition. Around 67 million tourists came to Africa in 2018, a record 7% increase from 63 million arrivals in 2017 and 58 million in 2016. There remains significant potential for growth in the Tanzanian market. While 1 million visitors came to Tanzania in 2018, South Africa and Morocco attracted over 11 million each.
The growth of Intra-African tourism also has Escarpment and the Tanzanian tourism industry preparing to receive growing numbers of visitors from within the continent.
Escarpment’s fine dining options are key to its luxury offering
Having built a strong brand with Escarpment, expansion is on the horizon for Mr Makyao’s tourism business. Investors will take confidence from government spending under the leadership of President Magufuli, as Tanzania invests heavily in the infrastructure required to accelerate the growth of its economy.
Tanzania’s Vision 2025 is focused on uplifting the country through building the necessary infrastructure and environment for industrialisation. The infrastructure spend has direct benefits for the tourism industry, and the Escarpment team intend to be fully ready before 2025 for anticipated growth opportunities.
“We are looking at 2024 as the year when we will have both the second and third lodge open.” says Mr Makyao.
“The second lodge should be up and running by 2021, and it will be located either in the Serengeti or in Zanzibar. Our brand is already well known, and we have distinguished ourselves quite well from the competition. The Serengeti is a favourite in terms of location because we want our guests to be able to view the famous wildebeest migration conveniently. Watching the spectacle is hard to do from our first lodge because of the distance.
“We want to develop our next two sites in line with our country’s vision 2025 goals. These goals are high on our President John Pombe Magufuli’s list of priorities.
“The construction of the $14.2 billion Standard Gauge Railway that connects Dar es Salaam to landlocked East African countries is just one of the projects that give us great encouragement. Investors in the tourism sector will benefit from the resuscitation of Air Tanzania, which has bought half a dozen new planes.
“The high-speed passenger train services will also help in delivering both domestic and international tourists to our exotic locations. Our president’s vision and willingness to pump money into infrastructure means we are well on our way to becoming a middle-income economy.”
Investors looking to engage with Godwin Makyao regarding opportunities in East Africa’s tourism industry, or those looking for further information on Maktech, are encouraged to reach out to Maktech Group Strategic Officer Robson Murigo via firstname.lastname@example.org