Published by AfricaLive.net
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]
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When Covid-19 struck, Coca-Cola, which has dominated FORBES’ lists as one of the world’s most valuable brands and innovative companies, deployed its resources and leveraged its distribution networks to make a difference in Africa’s economies and communities. Here’s how they did it.
Egypt’s Blueprint For A Better Tomorrow
Through the AfCFTA and their own Vision 2030 blueprint for economic enhancement, Egypt is preparing to emerge as a world leader in the global economy.
“We have a lot of determination and we own a lot of capabilities and natural resources that can put us in the lead in the world.”H.E. Abdel Fattah President al-Sisi
As Egypt embraces the initiatives behind the African Continental Free Trade Area Agreement (AfCFTA) and H.E. Abdel Fattah President al-Sisi ‘s Vision 2030, the country is on track to completely revitalise its economic landscape. Vision 2030, Egypt’s blueprint for transforming the economy into a global powerhouse, is focused on specific pillars that are aimed at empowering sectors and enhancing the country’s potential through youth development, technology, ICT, urban development, industry and infrastructure. On Egypt’s efforts to become an economic world leader and its commitment to the AfCFTA agreement, H.E. President al-Sisi said, “We have a lot of determination and we own a lot of capabilities and natural resources that can put us in the lead in the world.” Vision 2030 seeks to take advantage of Egypt’s natural resources and its key geographical location in Africa to remove barriers to intra-African trade and increase the investments across the continent. Adherence to the agenda will improve connectivity to link the continent by rail, road, sea and air and will boost trade, spark growth and create jobs.
In order to realise these goals, Egypt must first prepare its most valuable asset: its people. Egypt has a growing young population, where about 62% of the population is under age 29. This creates near limitless opportunities as the country strives to penetrate new markets and develop its “Made in Egypt” brand. Not only that, but Egyptian youth are also unique in their worldview. The post-revolution generations in Egypt are empowered with visions to change the future of their country, and companies are meeting this passion with training opportunities and education. Mohamed Shalbaya, CEO of PepsiCo, says, “The DNA of Egyptians, especially after the revolution, is ‘I want to achieve something’. Once you give them the right education, the right training, they excel. In the past two, three years, we have had 33,000 training hours for employees, and that gives us the edge because once they train, they can excel. Generation Z wants to be entrepreneurs, and we help them with that.”
In addition to training, many initiatives to nurture ideas and invest in talent are in place, such as innovation centres and incubators for entrepreneurial growth. Hala El Gohary, CEO of ITIDA, says, “In 2013, ITIDA established TIEC: the Technology, Innovation and Entrepreneurship Centre. Its main mandate is to develop the entrepreneurship ecosystem by developing talent from the universities, giving them the basic education around how to create their own companies and to develop business plans.” Technology centres exploit the youth’s propensity for technology, creating opportunities to innovate business and penetrate new markets via the internet.
The TIEC also houses an incubator and an accelerator to help establish start-ups in the country. Gohary continues, “President al-Sisi launched a programme for capacity development for 10,000 African youth and 100 start-ups. ITIDA has been mandated to deliver this initiative. Last year, we worked with about 3,000 youth out of Africa and Egypt and we delivered 30 start-ups. The idea is to have these 3,000 make their own company, and some of them did. In the first year, we helped the most prominent start-ups showcase their products.” With a driven and dedicated youth that are ready to become entrepreneurs, Egypt’s future is in good hands.
Technology development and the ICT sector not only appeal to the capabilities of Egypt’s youth but have also proved to be invaluable in the country’s human capital development endeavour. Egypt has been working diligently toward innovation and digital infrastructure for the benefit of all. H.E. Amr Talaat, Minister of ICT, says, “What is driving the telecom growth are internet penetration, more fixed broadband and more households with a computer. As for the IT sector, that’s a transformation on which Egypt is embarking impressively.” H.E. Talaat continues, “We need to create an ecosystem that encourages innovation and entrepreneurship. We are inviting start-ups into ideation camps, matchmaking forums, creating innovation hubs across the campuses of universities so that students can form teams, aggregate their solutions and focus on specific goals.” A strong digital infrastructure opens many opportunities and plays an innovative role in the overall wellbeing of the African continent.
In terms of urban development and infrastructure enhancement, the Central Bank has launched an EGP 50 billion programme to aid real estate developers to finance housing units for middle-income families. As the sector influences other industries, supporting real estate development and the local industry is one of the government’s priorities. For the 2020/2021 fiscal year, Egyptian government investment expenditures have been increased from EGP 150 billion to EGP 230 billion to expand various development and service projects nationwide. The New Urban Communities Authority fiscal budget has also been increased, amplifying construction company expansion.
The goals of the AfCFTA and Egypt’s Vision 2030 is to empower African industries, accelerate intra-African trade via a continental geographic zone in order to boost the continent’s position in the global market. Overall, the initiatives seek to strengthen the common African voice in global trade negotiations, a position that is long overdue. The Minister of Industry and Trade, H.E. Naveen Gamea, says, “The AfCFTA is a big step towards the economic integration through the actual liberalisation of trade, as it achieves major strides in the rates of economic development, and regional and continental integration through the productive and commercial integration based on competitive edges and building value-added chains across the continent. Egypt is keen to achieve tangible results in the fields that can lead to the regional economic integration and development, connecting civilisations and cultures of the African countries and deepening the cooperation with the international partners, as well.”
Focus on Namibia: The Vision Which Is Breaking Down Boundaries To Expand Namibia’s Infinite Horizons
On 21 March 2020, Namibia’s President Hage Gottfried Geingob was sworn in for his second term on the very same day the nation celebrated its 30 years of independence. Present at the celebration, a sure sign of Namibia’s peaceful and stable governance since independence, were the nation’s two prior presidents His Excellencies Dr Sam Nujoma and Dr Hifikepunye Pohamba, as well as the Presidents of Angola, Zimbabwe and Botswana. A grand and worthy augury for the future of continued progress, collaboration, growth and freedom for the nation.
Indeed, under President Hage Gottfried Geingob’s guidance, Vision 2030, the nation’s long term plan for industrialisation, is taking a very defined shape. Aided by the complementary Harambee Prosperity Plan fast-tracking the nation’s development, Namibia’s fifth National Development Plan (NDP5) highlights four pillars in order to target growth “In our development plan, we are trying to create an inclusive financial sector,” Hon. Carl-Hermann Gustav ‘Calle’ Schlettwein, Minister of Agriculture explains. An emphasis on education and a focus on SME development has been key to this inclusivity. “We allocate quite a few funds to our training programmes for SMEs,” states Baronice Hans, MD of Bank Windhoek. In recent years, Namibia’s Ministry of Education has highlighted the importance of vocational training. “At Letshego Bank, we are dedicated to improving livelihoods and promoting financial literacy initiatives,” claims Ester Kali, CEO of Letshego Bank. CEO of the Development Bank of Namibia, Martin Inkumbi details the Bank’s dedication in supporting the nation’s youth: “We have introduced a special lending product for targeting youth.” This, combined with a dedication to improving ease of doing business has been crucial to growing Namibia’s industries. “We have very favourable tax laws as well as lots of incentives,” confirms Patty Karuaihe-Martin, CEO of NamibRe. Vetumbuavi Mungunda, CEO of Standard Bank concurs, “Namibia has the key pillars of stability that are imperative for any business. There is political stability, social stability, a strong rule of law and a good judicial system.”
“We will live with the concept of ‘unity in diversity’ with diverse languages, cultures and religions. We live in harmony and celebrate each other with love. We welcome people from other countries with respect and care that is our valuable tradition as Namibians.”President Hage Gottfried Geingob’s inauguration speech, March 2020
Namibia is also extremely well established within the global economy with excellent market access from an export point of view. It is a member of the Southern African Development Community (SADC) and the Southern African Customs Union and has preferential trade agreements with SADC, the Common Market for Eastern and Southern Africa (COMESA) and East African Community (EAC). With borders on Angola, Botswana, South Africa, Zimbabwe and Zambia, the role of transport and logistics in Namibia has also been key to its economic development. Strategically located half way down Namibia’s coast, Port Walvis Bay, Namibia’s largest commercial world-class deep-water port, provides the SADC region with the quickest and shortest route to Europe and North and South America and a gateway for export and import of goods by neighbouring countries. “The government has invested quite a lot of money to extend and put a container terminal in Walvis Bay so that this hub can handle more containers and enhance trade,” reveals Hon. John Mutorwa, Minister of Works and Transport.
Awarded top position for the best roads in Africa by the World Economic Forum (WEF) for several consecutive years, Namibia’s road network has also been key in its contribution to the economic growth of other SADC countries. “We have about 47,000 km of road network of which 9,000 is bitumen road. In addition to that, we have four transport corridors, which are mostly serving our neighbouring countries and, by implication, the rest of Africa,” confirms Conrad Lutombi, CEO of Roads Authority of Namibia. Namibia’s ICT instrastructure, ranked one of Africa’s best, provides a different sort of connectivity to neighbouring countries. “Telecom Namibia also provides data connectivity to neighbouring countries via the SAT3 and WACS submarine cables,” explains Armando Perny, Acting CEO of Telecom Namibia.
As part of Vision 2030, Namibia is also determined to promote its Blue Economy Strategy 2017-2022 which addresses the development of marine mining, tourism, port infrastructure and services in an ecologically sustainable manner. . “We have a very long coastline and a very large maritime area which has a lot of potential,” states Immanuel Mulunga, MD of NAMCOR. Currently, Namibia’s fisheries contributes to about 15 % of total exports and is the country’s second biggest export earner, after mining and the third largest contributor to GDP. Namibia is also world leader in recovering diamonds from the sea. “Namibia has been a diamond mining economy for a long time,” elaborates Tom Alweendo, Minister of Mines and Energy . “We are currently exploring the sea through the development of unique technology.” Indeed, in May 2019 Namibia pioneered a distinctive form of marine diamond recovery which is also highly environmentally sustainable.
Namibia has a long history in mining and is replete with several minerals. “Namibia is a big country with a low population and lots of natural resources. Name it and we have it: minerals, fisheries, tourism, natural resources,” concludes Reinhard Gärtner, CEO of Namibia Civil Aviation Authority (NCAA).Today, due to first-class infrastructure and the ease of doing business, it is the nation’s best performing economic sector through the production of diamonds, uranium, copper, magnesium, zinc, silver, gold, lead, semi-precious stones and has the potential to lead the way towards the Fourth Industrial Revolution. “The great potential the country has as far as mining and mineral resources are concerned is evident,” claims Mark Dawe, Country Manager of B2Gold Namibia. “Everything is about re-establishing a natural environment.”
Farming also supplies nearly two-thirds of the population with an income, undeniably highlighting the importance of agriculture for Namibia’s economy. Ian Collard, CEO of Namib Mills states: “Namibia is currently a net importer, so we grow our business based on import substitution.” In February 2020, Namibia became the first African country to export red meat to the United States with state-owned Meatco’s shipment to Philadelphia of 25 tonnes of beef. “We penetrate the most advanced markets, like the US and China because we have made serious investments in our infrastructure,” declares Mwilima Mushokabanji, CEO of MeatCo.
Namibia’s horizons are limitless and today provide nation and continent with the opportunity for expansion as its policies and strategies work to crack open the nation’s immense capacity for potential and possibility.
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