Building Tanzania’s Telecommunications Powerhouse
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 the East African telecommunications and tourism industries.
Mr Makyao is a pioneer 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.