“Djibouti is in the process of becoming an essential link in the economic globalisation. We shall remain faithful to our ideals of unity, equality and peace by remaining true to our core values and our hospitality, generosity and solidarity culture that we can be proud of our identity in a world subjected to cultural standardisation.” – His Excellency President Ismaïl Omar Guelleh.
Djibouti is successfully improving its position in the global market by enacting several enterprising reforms to enhance and improve conducive business environments, property registration, credit availability, as well as empowering sectors such as infrastructure, finance and energy. These measures are all a part of His Excellency President Ismaïl Omar Guelleh’s Vision 2035, which has already demonstrated great progress, as Djibouti has leapt from the 154th in 2017 to the 99th position in the 2018 World Bank Ease of Doing Business Report. Central Bank of Djibouti Governor Ahmed Osman Ali, says, “We have worked hard to improve our investment environment. In terms of investors’ protection, Djibouti ranked second worldwide in the World Bank Doing Business 2019 ranking, gaining 94 places compared to 2018. Djibouti offers great potential to investors in various sectors, as well as an attractive fiscal environment.” The Vision 2035 is a strategy that is built through the participation of Djibouti’s youth, political parties, civil society, businesses, development partners and the international community. The vision is based on five core pillars: Peace and national unity, Good governance, a diverse economy, Investing in human capital and Regional integration.
In utilising its advantageous geographic position and strengthening its place as East Africa’s hub, the Vision 2035 recognises that Djibouti is a natural gateway for bordering and nearby countries for sea and air cargo transportation. Dabar Adaweh Ladieh, General Director of the Société International Des Hydrocarbures de Djibouti (SIHD) says, “That is why Djiboutian ports, for instance, are destined to serve the whole region. Goods from Europe, the Middle East and Asia will arrive here. We will have an exchange centre thanks to our strategic plan and the President’s vision to develop infrastructure.” In keeping with this goal, Djibouti has been investing in new port terminals, as well. “SIHD, in partnership with other companies, is building a new stocking site in the Damerjog economic zone where there are also other projects to be realised, like the port and the stocking site of natural gas,” says Ladieh. “So, we are proceeding with this global vision in mind.”
Diversifying the economy is crucial to the Vision 2035, and the government is dedicated to ensuring consistent GDP growth, which will create over 200,000 jobs in the next fifteen years. One of the means to do this is through the energy sector. Djibouti is no stranger to ambitious projects if it means improving the livelihood of its people and securing a better future. As such, the government has enacted several programmes that seek to meet 100% of the country’s energy demand with renewable resources in order to combat pollution and decrease dependence on imported energy resources. This can be done through geothermal energy, wind energy, solar energy as well as waste energy. The government is currently moving into the production phase of geothermal energy, with wind energy production set to begin in spring 2020. Ensuring the abundant availability of reliable and cheap energy puts Djibouti on the cusp of a green revolution and is a crucial step toward the achievement of Vision 2035, with positive effect on investments and employment resonating throughout the economy. The government has also invested in highly specialised programmes that are designed to nurture the thriving young population. Mr Yonis Ali Guedi, Minister of Energy, states, “All these projects are to develop Djibouti, making sure that energy is abundant and cheap, to attract investors, jobs can be created, and the prosperity of our citizens can be increased. Development always needs energy, so, the country needs to provide itself with green and clean energy.”
In accordance with the strategy mapped out in Djibouti’s Vision 2035, the government has taken on an astounding series of projects aimed at updating Djibouti’s infrastructural landscape. Part of this plan is found in the country’s new International Free Trade Zone. Opened in July 2018, the DIFTZ marked a turning point in the history of Djibouti and the entire East African market. The Zone will inevitably boost local and international trade and create employment for Djiboutians. The Free Zone clearly represents Djibouti’s rapid and impressive transformation and serves as a beacon of light for the future, positioning the country as a hub for trade, logistics and finance.
In addition to the government’s dedication and all these vast improvements across many sectors, Djibouti’s participation in the African Continental Free Trade Agreement will also create an environment where investors can thrive. The AfCFTA is meant to create a tariff-free continent that could boost intra-African trade. Governor of Central Bank of Djibouti, Ahmed Osman Ali, states, “It is a great opportunity: it will grant access to a wider market to companies operating here. To take advantage of increased regional integration. We have invested heavily in port, road, rail and telecommunications. We remain very confident about the positive effects of the African Continental Free Trade Agreement in terms of activities, growth and job creation.”
Driving Djibouti’s Development Goals
Afreximbank Focus on Djibouti
Afreximbank has pledged to work with public and private entities in Djibouti in order to deploy the Bank’s trade finance programmes in support of the country’s economic priorities.
A small nation in the Horn of Africa, Djibouti’s location along the Gulf of Aden, its proximity to the Mandeb Strait, the southern entrance to the Suez Canal and Yemen gives the small African nation a strategic role to play along one of the world’s busiest trade routes. Ten percent of the world’s oil exports and 20% of all commercial goods traverse through the Suez Canal, passing close to Djibouti. With the vision to be the trade finance bank for Africa, Djibouti plays an increasingly bigger role within the Afreximbank portfolio.
Djibouti signed onto the African Export-Import Bank Establishment Agreement in 2016 marking the commencement of the partnership. At the signing of the agreement, President Ismaïl Omar Guelleh stated that this partnership will help the country advance its trade related infrastructure and the areas of logistics and renewable energy. The bank has also helped to promote and finance Djibouti’s industrial sector in the area of export manufacturing. With help in financing from Afreximbank, Djibouti has been able to further leverage its important geographic position to its advantage. It will also flourish in new areas of the economy such as tourism and investment.
During its partnership, Afreximbank has pledged to work with public and private entities in Djibouti and would link them with other African and international economic players in order to deploy the Bank’s trade finance programmes in support of the country’s priorities, including the development of renewal energy infrastructure through the Bank’s funding arrangement with KFW, the German development bank, construction of world-class tourism amenities under the Bank’s CONTOUR facility and expansion of Djibouti’s transport and logistics infrastructure. The trade and infrastructure development plans initiated by Djibouti are very impressive and have the potential to transform the country and to make an impact, not only in the region but across Africa, as the country moves toward becoming a key logistics hub for the continent.
Due to its location and the government’s recent policy reforms, the country is attracting more business and investment than ever. Djibouti has recently implemented a policy of international free trade zones, which enables foreigners to start business in the country easily and without paying profit taxes. These policies have been effective in recent years to attract much attention to the tiny nation as it seeks to create a conducive business environment. Already, our partnership has seen positive effects with Djibouti’s Ease of Doing Business ranking increasing in 2018 to 99 up from 154 in 2017.
Djibouti is one of the many cases in which partnering with Afreximbank has helped countries develop their trade sectors. In 2017 Afreximbank focused on a forward looking initiative called Impact 2021, Africa Transformed. This initiative is fixed on strengthening four main sectors: intra-Africa trade, industrialisation and export development, trade finance leadership and financial soundness and performance. Just in 2018, Afreximbank saw 24% overall growth with a US$55 million increase in income. Up from US$229.8 million total income in 2017, the total income for 2018 was US$285.4 million. Afreximbank also saw a 13% growth in its assets totalling US$13.42 billion for 2018 due to a rise in net loans and advances. The bank’s operating profit saw an exceptional rise in 2018 to US$394.8 million from US$109 million in 2017.
This growth is continuing into 2019 with a 59% increase in total revenues for the first three months of the year compared to the same timeframe in 2018. Though it is a small country, Djibouti’s location elevates its status in geopolitics, and it is only logical to assume that its importance will continue to grow as nations turn their attentions to Africa and the Middle East. With a positive outlook ahead and a successful year behind us, Afreximbank is well on its way of achieving its vision and assisting Djibouti in its development goals.
Footnote: The African Export-Import Bank (Afreximbank) is the foremost pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade. The Bank was established in October 1993 by African governments, African private and institutional investors and non-African investors. Its two basic constitutive documents are the Establishment Agreement, which gives it the status of an international organisation, and the Charter, which governs its corporate structure and operations. Since 1994, it has approved more than US$67 billion in credit facilities for African businesses, including US$7.2 billion in 2018. Afreximbank had total assets of US$13.4 billion as at 31 December 2018. It is rated BBB+ (GCR), Baa1 (Moody’s), and BBB- (Fitch). The Bank is headquartered in Cairo.
The Central Bank Fights Financial Exclusion And Eases Business
Governor Osman Ali vows to do even more to attract banking activities to Djibouti and enable further growth.
Central Bank of Djibouti Governor Ahmed Osman Ali is a key player in the nation’s strategy of enabling infrastructure improvement and economy diversification to become an emerging country by 2035. Penresa sat with him to discuss the achievements of his mandate and his plans to keep supporting Djibouti’s Vision 2035
How is the Central Bank working to help Djibouti become a middle-income country by 2035?
The ambition to establish Djibouti as an emerging economy by 2035 is part of the national development strategy pursued by the government’s sectoral policies. The objective is to transform Djibouti into an international logistic and financial hub.
The Central Bank is thus working for a more dynamic, efficient, sustainable and inclusive financial sector. An initial comprehensive reform package began in the early 2000s: since then, the sector has grown from five to 36 financial institutions (including 11 banks, from two in 2006). Subsequently, to expand the financial sector, our priorities are focused on the following points: The viability of the sector with the impressive strengthening of the supervisory framework, as well as anti-money laundering and anti-terrorist financing measures. Reference texts are regularly updated according to international standards;
The promotion of financial inclusion through initiatives such as the right to an account, with banks being legally obliged to open an account for people with a minimum income of DJF 40,000 (e200). Also worth mentioning is the development of microfinance and mobile banking. To ease access to credit for SMEs/SMIs we have established a Partial Credit Guarantee Fund and initiated the necessary reforms to launch leasing activities in Djibouti;
The modernisation of the national financial infrastructure with the introduction of i) a modern national payment system taking into account the new paperless electronic payments (real-time gross settlement, automated clearing house…); and ii) a new fully automated credit information system.
The African Continental Free Trade Agreement is meant to create a tariff-free continent that could boost intra-African trade. Do you feel this will contribute to Djibouti’s economic growth?
It is a great opportunity: it will grant access to a wider market to companies operating here. To take advantage of increased regional integration (Djibouti is a founding member of COMESA), we invested heavily in port, road, rail and telecommunications. Djibouti is AGOA eligible, which is significant for our Indian and Chinese partners.
We remain very confident about the positive effects of the African Continental Free Trade Agreement in terms of activities, growth and job creation.
You were awarded Central Banker of the Year 2018 at the Global Islamic Finance Award. What did you do to expand Islamic Finance?
We realised that a significant portion of our population was marginalised in the financial sphere due to the lack of Shariah compliant financial products. We have made the necessary efforts to introduce and develop Islamic finance, and today the three active Islamic banks (the first of which established in 2006) represent 20% of the market. We also launched an annual Summit bringing together in Djibouti the institutions and eminent experts of International Islamic finance.
The award we received is an acknowledgement of the efforts undertaken by all stakeholders to achieve these results.
For the readers of FORBES AFRICA and the discerning investor, why is NOW the best time to invest in Djibouti?
We have worked hard to improve our investment environment. In terms of investors’ protection, Djibouti ranked second worldwide in the World Bank Doing Business 2019 ranking, gaining 94 places compared to 2018. Djibouti offers great potential to investors in various sectors, as well as an attractive fiscal environment.
Developing And Connecting Djibouti Through A World Platform
Minister’s Round Table
Penresa sat down with Hon. Youssouf, Minister of Foreign Affairs and International Cooperation, Hon. Awaleh, Minister of Agriculture, Livestock, & Fisheries, Hon. Dawaleh, Minister of Economics and Finance and Hon. Guedi, Minister Minister of Energy & Water.
What big project is your ministry focused on right now?
Hon. Youssouf: We need to speed up the process of creating job opportunities. First, in education and then in job creation. That is why we are compelled to seek opportunities for young people and women. Djibouti has signed the ICSID Convention. You need a legal framework to reassure investors that their investment is protected. We hope that it will boost the volume of the investment, because more investment means more job opportunities. Vision 2035 is our development plan over the next 20 years that will help change the livelihood of people. Djibouti has also signed the African Continental Free Trade Agreement (AfCFTA). It is vital for African countries to create that common market because trade is the engine of the economy. When you have that framework, that facility to boost and step up the intra-African trade, it creates job opportunities, wealth, rapprochement between countries, community. We believe that the bigger the market is, the bigger the opportunities to create job and wealth.
Hon. Awaleh: The Ministry is involved in several projects focused on sustainable agriculture. Djibouti has an arid ecosystem; it is more or less a desert with black stones. The rainfall is on average 150mm per year and we have no rivers. The best three activities for Djibouti (because of saline ground) are date palms, greenhouse horticulture and livestock. One example is that we have a laboratory here for date palms. There are a lot of varieties, and the best variety is called Medjool. One kg of Medjool is about $US30. It is the highest price for a fruit. It is very difficult to get this variety: California, Israel and Morocco have it. One tree takes eight years to grow, and in all its life, a date palm will give you 10-20 shoots. The problem is that we do not have date palms here in Djibouti. So, we have done the research and we have discovered that we can produce date palms from cells. It has taken us 5-6 years, and we have chosen the best varieties. In the world, we are the fourth laboratory which produces Medjool dates in this way. We are proud to have introduced date palms specific for Djibouti.
Hon. Guedi: We are working toward 100% green energy. We are developing other forms of energy like wind and geothermal energy. We never had a real project in geothermal, but at the end of April/beginning of May 2019, the presence of geothermal energy in the Fiale project was confirmed. The three drillings were done at a depth of 2,600 metres. Now, we are going to move to the next step, the production. We have signed all necessary contracts as far as wind energy is concerned after one year of negotiations to finalise the production of 60 MW of wind energy with African Financial Cooperation in Ghoubet. As of now, the windmills are already being produced, using German technology. Completion of the project is 12 months, so in April/May 2020, we will start with the production of wind energy. We have also developed solar energy. The French company Engie contacted us for a first project for solar energy. We have already signed with EngieAfrique for the development of 30 MW solar station on the site of Grand Bara. This will be the first step and we hope that we will finalise all the documents for the project in two to three months. As you can see, the energy revolution in Djibouti is coming.
Hon. Dawaleh: The growth over the past five years has been 6-7%, which is comfortable. The balance of payment is now at a good level; in the past we had a very high debt, while now it is at 70%. All the macro-economic indicators are reasonable for Djibouti. The driving force of the economy of Djibouti is the port, the air, the airport and the infrastructure. We have six ports, we have trains. We deliver the flow of goods from COMESA countries to the world. We also intend to handle the flow of information and finance, of capital between COMESA and Djibouti because we want to be a hub for money, since our currency is pegged on the dollar. All people in the Eastern African region should put their money in Djibouti. We want to be the hub of the flow of capital and information, since we have seven telecommunication submarine cables, not only for Djibouti, Somaliland and Ethiopia, since the cable encompassing Africa runs through Djibouti. So, our focus areas are transport, flow of information and capital.
Maktech’s Godwin Makyao: Now Is A Time of Entrepreneurial Opportunity in East Africa
As an executive decision-maker in both the telecommunications and tourism industries, Godwin Makyao could not have experienced a more diverse set of challenges as the Covid-19 pandemic hit East Africa.
The crisis has paralysed the global tourism industry. On the other hand, the reliance of all industries on the telecommunications sector has been magnified.
In East Africa, the crisis could act as a catalyst for the further development of the telecommunications industry, opening up opportunity for investors and operators in the sector.
Mr Makyao is the Founder and Executive Director of Maktech, a Tanzanian telecommunications with operations also in Mozambique. Mr Makyao believes that in the face of the crisis, the industry stood up well despite being held back in certain areas by a lack of infrastructure.
“I would say the sector has responded positively to the extent the infrastructure could allow.
“Our telecommunications industry was not ready for a pandemic such as this one. Here in Tanzania, for example, it was assumed that data infrastructure would only be required in workplaces, schools and other vital institutions; so the infrastructure was concentrated there.“
“When people got confined to their homes; however, it was discovered that home data was in high demand. We are looking to close this gap to ensure that people have access to fast internet at home, the parks, the beaches and even the football pitches.”
In Tanzania, where 17 per cent of the population spread over 55 per cent of the land of the country do not have access to mobile coverage, building telecommunications infrastructure is a national priority. Tanzania’s Vision 2025 policy which intends to industrialise the Tanzanian economy is facilitating access to funding infrastructure development. The rate of change in poverty-stricken rural areas has until now been a concern, however.
“Not much has changed in Maktech during the Covid-19 crisis apart from our increased focus on the need for fast internet in rural areas”, says Mr Makyao
“Although most people in rural areas now have mobile phones, most of those are not smartphones. A scarcity of smartphones means slow internet and information deficiency. We are, therefore, faced with two problems that need solving; the need for high-speed internet in rural areas and the need for smartphones. Both of these problems need to be addressed by delivering low-cost solutions since most of the people are low-income earners.”
While in the telecommunications industry it is expected to be a time of growth, for the tourism industry the focus is on adaptation.
Mr Makyao explains, “When it comes to Escarpment Luxury Lodge, we have had to make a different approach because health and safety are now the priority.
“Our staff is currently working hard to keep track of who used what facility at what time. All this is designed to maintain accountability and to keep other guests safe in case we have an infection. Our attention has gone away from the plans we had prior to expand and improve our facilities, to investing in tracking infrastructure. In a luxury hotel like ours, guests expect nothing less than the highest standards of safety and health; so our focus now is in investing adequately towards that.”
As economies globally seek to adapt to the crisis, and tourism industries slowly begin to come back to life around the world, Mr Makyao believes it is too early to make predictions on the long term impact for the sector.
“I think it’s too early to tell at the moment. We still don’t know how travel will be affected entirely. Europe and America could introduce new criteria or regulations when it comes to travelling to Africa. The standards required for hotels might also change drastically.
“We, therefore, need time to be able to look at the changing trends, to craft a long term strategy. A lot will depend on the setting of common standards globally in the hospitality sector. Our focus has to be on the safety and health of guests first before we can have a clear picture on other issues.”
Despite the challenges that 2020 has brought to both industries, and the East African economy in general, the long-term prospects for growth in the region remain strong.
Godwin Makyao remains determined in his mission to inspire a new generation of Tanzanian and African entrepreneurs. And the Maktech founder is open to foreign investment and collaboration to fuel growth in telecommunications and tourism in East Africa.
Mr Makyao is a pioneer in developing Tanzania’s telecommunications infrastructure through Maktech, a company he founded in 2001.
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.”
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.
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 Vodacom TZ, Vodacom MZ, Vodacom DRC, Nokia, Airtel, Tigo, TTCL, Helios Towers, Huawei, ZTE, Ericson, Ceragon, Commscope, TMCEL and Halotel.
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 Vodacom, Nokia, Airtel, Huawei, Ceragon; Tigo, ZTE, Helios Towers and Ericson. 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 Makyao 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.
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.
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 and ICT in Africa, or those looking for further information on Maktech, are encouraged to reach out to Maktech Group Strategic Officer Robson Murigo via [email protected] or [email protected]
How To Select The Right Forex Broker
Content provided by CompareForexBrokers
In an industry that is quite competitive, there is always a question as to whether or not a customer has chosen the right product for themselves. This concern rings true with money Forex Traders.
The Forex Broker market is saturated with many different trading options; however, we have tried to come up with the most important metrics that should be considered when choosing which Forex Broker to leave your investment with. In all honesty, it could be the difference between maximising your investment and seeing your capital go down the drain.
Is your broker regulated?
One of the more integral features of a Forex Broker is their Security. Is the Broker regulated? The regulatory body in South Africa is known as the FSCA (Financial Services Conduct Authority). The FSCA is known as a Tier 1 regulator; is a broker has satisfied their requirements, as a trader you would feel comfortable to rely on their credibility.
How much do my trades really cost?
Another aspect of the Forex experience that determines what Broker a trader chooses is the costs involved with the brokerage account. No matter where a trader is looking, there are always commissions to be paid and spreads to be assessed. How much of a profit is a broker attempting to gain? Are majority of your wins, going straight to your bank account? This will also depend on the type of trader you are. If you are looking for tight spreads, you might choose to trade with a specific broker.
One of the more popular discussions when it comes to compare Forex Brokers centres around the trading platforms that brokers use, which brokers offer the most advanced platforms, the most popular, the more original platforms etc. One of the key assessment criteria is whether the platform is easy to understand, use and process trades through. Day traders might require features including Level 2 quotes as well as in depth market charts to assist with analysis. Whereas other platforms might require satisfaction of certain benchmarks to enable a trader to employ that particular platform. A good reference point is this list of forex trading platforms which is segregated by software and traders ability.
How important is customer service?
Another metric in determining the most optimal Forex Broker is assessing their customer service. Does a broker offer 24/7 phone and email access? The most successful Forex Brokers will do their utmost for their customers, including providing an expert account advisor to assist with making trades, maximising profits, and minimising risk throughout a traders FX portfolio. Some FX brokers also offer translation services. If you’re interested in seeing how the various brokers stack up to a customer service test, see here.
What does my broker offer?
Finally, before making your final choice on FX Broker – attention should be paid to the financial instruments offered by the various brokers. Some offer the basic currency pairings and not much else. For a trader looking to diversify their portfolio and manage risk in the most effective manner possible, choosing such a broker would not be the right decision. Brokers that offer commodities, agriculture instruments, metals, stocks, cryptocurrency, and futures would provide a trader with all the tools to ensure they achieve trading success.
Always remember that trading comes with risk and its important to manage such risks in an adequate manner. See here for more information on African brokers and what might suit your trading strategy.
South Africa’s MISSION HEALTH
“We didn’t’ see this coming”– Bill Gates in last year’s annual letter as Chairman of the Gates Foundation.
No, he wasn’t talking about COVID-19; Gates was referring to other surprise megatrends in global healthcare, one of the most complex, regulated and challenging sectors, which demands principled executives who can safely helm our Mission Health. Gates’ worthy list informs the 2020 edition of Executive Forecast’s South Africa report which covers a greater understanding of the true economic impact of health, redefines the catch-all term of “access,” and explores financing mechanisms, breakthrough technologies, and empowerment of the historically disadvantaged.
Mission Health highlights how we can work together to navigate the complexities in restoring investor confidence, attracting investment, and ultimately, achieving the “triple bottom line” in a South African context.
Strong Health, Stronger business
If we needed any greater evidence of the massive impact of health on the economy, witness the single biggest market decline since the Great Recession of 2008, sparked by the COVID-19 pandemic. But the impact can also go the other way: investing in health is always good business. South Africa’s business and government communities understand that you can’t invest in what you don’t plan for—and you won’t invest in what you don’t understand. Together, they’re driving planning and greater understanding through formal and informal channels.
“We are a proactive government and prioritize the people’s needs. We are creating platforms for the private sector to participate and invest in the country.”Thembi Siweya, Deputy Minister of the Planning Department.
“We have been pushing for investment and growth which is a critical issue in South Africa, as nothing happens without them,” says Cas Coovadia, Director of Business Unity South Africa (BUSA). “It is a matter of changing the narrative and it is in our hands to do this, government, business and labor together. We need leadership that understands our role in the global economy and what needs to be done to get our economy going.” Stavros Nicolaou, Chairman of Pharmisa, a South African industry trade-group stresses the importance of implementing structural reforms, and that the business community is fully behind President Ramaphosa’s drive to restore governance, liquidity, and sustainability in state-run enterprises.
Risenga Maluleke, Statistician-General and Head of Statistics South Africa, emphasizes the importance of knowing as much as possible about the population you’re planning for. “We collect data from households, from industry, from administrative records from schools, clinics and police. Statistics must be independent, facts can be stubborn!” Maluleke asserts. “There have been several initiatives championed by the President to encourage Foreign Direct Investment into the country,” says Thulisile Manzini, CEO of Brand South Africa. “These include the launch of the South African Investment Conference with a clear target of U$68 billion over 5 years. Of the inaugural U$17 billion investment, approximately U$14 billion worth of projects is in the implementation phase across different sectors. Last year’s SA Investment Conference also saw an investment commitment of U$21 billion pledges made from various investors.” Manzini also points towards a new “One Stop Shop” concept which removes red tape for investors by providing more coordinated, streamlined, and professional services to companies, bringing together special economic zones, provincial investment agencies, local authorities, and government departments. Talking about economic spillover, “there is a whole domino effect in coming up with innovative medicines and treating patients,” says Dr Konji Sebati, CEO of IPASA, the Innovative Pharmaceutical Association of South Africa. “We create a virtuous cycle of life. Few people are aware of the contribution that pharmaceutical companies make to human welfare. Not only do their medicines save lives, it improves health, and prolongs and enhances quality of life, but medicines also reduce overall healthcare costs.”
“FEW PEOPLE ARE AWARE OF THE CONTRIBUTION THAT PHARMACEUTICAL COMPANIES MAKE TO HUMAN WELFARE”DR KONJI SEBATI, CEO OF IPASA
Shifting disease maps
Africa has historically been the epicenter of a multitude of global health initiatives. Notably, the world’s largest publicly-funded antiretroviral (ARV) program, increasing life expectancy by over a decade, an unprecedented achievement that has led to unprecedented business opportunities. However, partly as a result of its successes, the disease profile of the continent has been shifting—and its healthcare system along with it. South Africa must continue to develop expertise in managing both communicable diseases and non-communicable diseases, whose treatments must coexist in a fragile balance. Through collaborative know-how and coordinated effort between public and private initiatives, people on both sides of the equation believe it’s possible to re-engineer the country’s healthcare system. The National Health Insurance (NHI), is a universal health coverage scheme being implemented over a 14-year period starting in 2012.
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