Transcript | Lino N'shimba

Arthur Katalayi (host): Good afternoon, this is the third edition of The Right Advice Podcast, presented by myself, Arthur Katalayi, senior partner of A2k Advisory. Today we’re having the president of American Chamber of Commerce in DRC, M. Lino N’shimba, thank you for having us.

Lino N’shimba (guest): Thank you for having me, good day.

Arthur Katalayi : Well, you have a very interesting background between Congo, and United State, Congo again and now you are in between the two because you are representing the American Chamber of Commerce;  how did you start? From Congo, going to the United States, can you tell us a little bit more about it?

Lino N’shimba : Alright, I think that it all started when I was a young man, I grew up in Bordeaux, I came back to Zaire and spent 12 years in the elite school of the college Boboto and then went to Egypt with a scholarship. I went to study there and became the first black tour guide in Egypt. I spent a couple of years doing that, with Europeans tourists of touristic companies. I then went in and out to Monaco and afterwards went to the United States to further my education where I got a degree in political science, in California; and I furthered my studies in business administration with a master degree; and I am currently preparing my Phd in Philosophy. So that’s a little bit in terms of my educational background. After that of course I went into the world of working and I did many different things related to business, until I became with my last job as a banker, for Wells Fargo advisors, which was at the time the biggest bank in the United States. So, it is only after a few years that I decided to return to my home land, Africa, and particularly Congo.

Arthur Katalayi: And why is that? Because you had a great career, great life over there, California is tremendous, beautiful, so why the need to come back?

Lino N’shimba : I think that at some point you have to realize your own value within the system. So me being myself I was one out of many in the United States, with what I was doing as a banker I was just one banker out of thousands and thousands of bankers. So I decided that it was important to do something that brings value to our people, and being in the world of banking and investments I saw firsthand how businesses actually make a country, because governments don’t make a country, small enterprises and entrepreneurs and companies make a country; they build the country because they are the job creators. A government at some point is saturated because they can’t get more than what the government can afford, but businesses continually create jobs. So I saw it first hand, why not help out in a place where I’m not necessarily one out of the many but one out of a few? That is what led me to put my eyes on the continent and on DRC.

Arthur Katalayi : And you came back and created Africa Equity and Investments, your own company.

Lino N’shimba : Yes, I created Africa Equity and Investments group, which is more like a holding company with strategic consultancy. That is what we do and it has many different companies within it, amongst them Africa Equity Mining for example, Congo Recycling, so we do that with other companies that are a part of the group that we created.

Arthur Katalayi : In regards to mining, what are your interests ? We all know that copper, cobalt, and lithium are the minerals in demand and in vogue currently and how do you see the demand going in regards to China and the United States?

Lino N’shimba : The demand for the mineral will always be there and will always be increasing to my point of view. Now doing business is also about having a vision; having a vision to fulfill or to fill a need that could be a present need or a future need. That is why we entered the mining world because we realized early on that the energy in the world is shifting and we understand that for example by 2030 there will be more electric cars than ever before and most of the car manufacturers are shifting into electric and the need of batteries for those electric cars. So we got into mining because we understand that the demand is there, it continues to increase. Strategically we made acquisitions of some mining squares (concessions) in the DRC, in different part of the south, in Katanga, and particularly in Lualaba, and in the Tanganyika province.

Arthur Katalayi : In regards to the mining sector in DRC, there’s been some strong Chinese investments over the last 10, 15 years, obviously North American countries particularly the United States want to be back in the game, Freeport McMoran a couple of years ago sold their stakes to China Moly (CMOC) and now a couple of months ago president Biden asked for some wartimes powers used during the cold war for mineral needed for clean energy push, and under the Defense Production Act the objectives are to secure US sources of critical minerals with key components of clean energy technology. So in a nutshell, that says that American investments in the global mining sectors in particularly the Congolese mining sector are welcomed and are obviously needed, how do you see this going forward and that we need to create an environment to which American investments are going to be able to thrive? Or do American investments need to come back to whatever situation they are finding as we have seen companies like Glencore or the Chinese that are still able to operate here, despite of the environment that we all know of?

Lino N’shimba : Yeah I think talking about the environment of businesses, it’s important to understand that America will always operate in the American way, that means that we can not necessarily plunge into an environment where there is a lot of corruption. There’s no good governance etc. Those are components that we have seen evolving in the right direction. The last few years has shown us that the government has tackled those issues seriously and the interest of American companies will be always based on doing the right things, doing business correctly, into an environment where there’s a government with less corruption or no corruption at all; so that being said, it’s seems that we don’t have the same standards as others. So the Chinese can come in masses, Indians can come in masses but we carefully want to thrive in a good clean environment for businesses and for the national people to thrive. So I believe that we have huge interest right now, and the reality is following. For example, in July, we’re going to have a serious economic mission in the United States dealing with agriculture and engineering and the mining sector as well. So, having the opportunity is one thing, but engaging the conversation with the real players in the field of mining is a different element on its own. So it is important that we engage those conversations, but now, that being said, I do believe that Congolese involvement is actually the most important thing in terms of money – it will be good to see some Congolese getting together and creating good companies that exploited they own resources and that perhaps a forfeit dream but I believe that we have resources, we have the people here and we do have a lot of money floating around here. So we need to look at it that way, we cannot only wait for foreigners to invest in the DRC or wait for Americans to come and do things. It has to be a joint effort with everybody.

Arthur Katalayi : And we’ve seen this economic model in other African countries, Nigeria, Ghana,  in which a lot of nationals of those countries are big operators, within oil and gas or in the mining sector, can it be something to be replicated here?

Lino N’shimba : I think that we don’t have to reinvent the wheel. We need to look at what other people have done in their countries to create some sort of autonomy, to create some sort of national wealth instead of constantly turning to the foreigners to bring their own investments here. 

Arthur Katalayi : And going back to your business background you told me earlier about the relationship that you had with one of the Fedex founder, Charles Brandon, who he was a friends of Fred Smith, Fedex Founder, how did he inspired you to get to accomplish what you’ve done?

Lino N’shimba : Charles Brandon was basically a mentor to me, because in the world of business you need a few elements to be successful, you need to have a vision, you need to have a passion in what you do and you also need to have some sorts of mentoring; especially if you’re getting into a field that is unknown to you. So Charles Brandon was not only a friend but also a mentor to me, he was there at the early days of the multinational company FedEx, I’ve learnt a few things from him, that led me to become who I am today. And the most important thing that I learnt from Charles Brandon is that, he always told me “Lino, there’s a way to get result guaranteed in what you do, by doing nothing”. So if you want to get guaranteed results you do nothing and you get 0. So, now when you put it on the reverses you understand that you have to do things, you have to take risk, in order to get something happening, and this is exactly what I did when I decided to come to Africa, I looked into the market, I looked at what was needed at the time because I traveled a lot in my lifetime. And I like good food, and I love good wine, I grew up in Bordeaux I have gotten an early love for wine. But I realized at many places I will go I will eat well but I will not drink a good wine. So especially in Africa, I visited many countries and I decided that it was an opportunity to not only drink good wine for the love of the world to Africans, but to also initiate a culture for it.

Arthur Katalayi : Talking of which, in addition to being the chief executive of Africa Equity Investments, and the president of American of Chambers of Commerce in DRC, you’re also the CEO of your own wine company, which is named as In Vino Veritas, California fine wine, so you got into that after living in Bordeaux and initially got you a first entry in the wine world?

Lino N’shimba : No, I mean my early childhood was in Bordeaux, and there was always wine at the table. So, I think it triggered me to more of the interest into wine, but it’s not given to everybody at the same degree. We are nine kids in the family but only three of us are into wine and you can’t say it’s the majority of the children. So, that, love came early on but I think when you do something you must have a passion for it. You don’t just do or create a business because your neighbor needs that. You have to love what you do, you have to have a passion for it, and you should prevent yourself, from considering it as a child, because if you look at the companies in the world today, they are rare companies where there’s one owner with 100% ownership; so most of the time you will have someone with 10, 15% equity or shareholding. Because they don’t consider it as the baby, they consider it as a common baby, as we said in Africa “A child is raised by a whole village“. It’s the same concept in the business, because you need new people to come in, you need new ideas, you need challenging ideas and you do need at some point additional capital to grow. And if you don’t have it, you have to do an exchange in terms of equity, shareholding. So for me wine is simply a passion. Today, I am less involved in the wine company because my wife took over that portion of the business; she is passionate about wine which is an element that is needed in terms of a good business. So, as we said, the company exists and it is thriving in California.  It is based in California in the San Francisco Area and we export Californian fine wines to the world and especially in Africa and in Congo; and today we are not simply limited to California Wines. We deal with the finest worth wines in the world. We deal with the finest champagnes, the finest bubbles in the world.

Arthur Katalayi : And in California, wine production has a particular history, as well as the wine in France and Bordeaux. There is also wine in South Africa, what are the possibilities to create a wine industry in DRC, with production based over here?

Lino N’shimba : I would say, good wine comes from everywhere wine can be produced. In 1976 for example, the Judgment de Paris a Californian wine won out of all the French wines, and in that competition, you had actually two of the five classified wines of France as some of the best. And Chateau Briand was in the competition. But, talking about production of wine here we engaged some studies; recently, in the eastern part of the country. So, we realized that the slopes of the market, the lower part in the volcanic area we can grow some Chardonnay and some Pinot Noir. So it’s an experiment that already started, but as you know for red wine you need to wait five years. All we need to control as a challenge is the excess watering. So, wine doesn’t like excessive water; the reason why we go on the slopes is because we don’t want the water to dig into the ground but slide off. That is the only challenge. Beside that all the elements are there, the sun gives us good sunrise, you have good climate for winning the eastern part of the Congo. It will take years to get there and it takes good investments and long term investments to get there. Five to ten years to see a good bottle of red wine, we would look into 2027, 2028.

Arthur Katalayi : And what are the bracket of investments? Just to have a general idea for the public to be able to start production?

Lino N’shimba : I mean, if you want to do wine, to be able to give the whole country wine we would talk about millions and millions of dollars. But this is something that we start all as a small production, limited production, accessible to a few. And then over the course of time, it’s going to evolve into a bigger production. The lands are available, the expertise is there, and I have my own good friends in Napa Valley and even in the Champagne (France) region. We have good partners that are willing to come and work with us. It costs, and it’s a long-term investment, so if you think of investing today and harvesting tomorrow, it’s not the right business for you; you need to put your money, effort, love, time, and passion in order to get something good.

Arthur Katalayi : Thank you for giving us the outlook, we are now taking a little break, so we’re going to have a jingle/publicity of our sponsors of today, which is Rawbank; the biggest bank in the DRC, which celebrating 20 years of existence this year.

ADS RAWBANK

Arthur Katalayi : So going back to your main activity, which is the president of the American Chamber of Commerce in DRC. The American Chamber of Commerce is the biggest federation in the world, I believe. American businesses are all over the world, in America but also internationally as we know in tech…McDonalds…I’m not going to name them all. What are your activities, what is your vision in the DRC in regards to the private sector here and over there (in America); the liaison between the two, the relationship, what can be foreseen for the future?

Lino N’shimba : I would say that we are proud to be a part of the US Chamber of Commerce, which is like you said the biggest federation of enterprises in the world. We count over 3 millions companies as members of the US Chamber of Commerce throughout the world. And we are the national representation in DRC which is called AmCham DR Congo. Now, as such, we have the duty to get our members of American companies and Congolese companies because it’s not only about American companies. American companies are for the majority of members but we also do have Congolese companies as members. We want to make sure that they stay compliant with the national laws and regulations in order to do business in the correct way. And we are advocates of all our members and we have them grow as well. Now, we are the one political link between the companies of the US that need to come to DRC for opportunities of investments, and we have them settle in the right way. Following the compliance of the law here and we are there to make sure that they are treated correctly and understanding that in any level playing field American companies always perform best. We are fighting for example right now for good normalization in the taxation quality; for example in the DRC because it seems like there is multiplicity of taxes. We want it to be streamlined and we are currently working with the Prime Minister’s office to make sure that we get the streamline of the taxes and we not only working theoretically but we also have the resources to have the country get there, because as you know if we get to the numerization and digitalization of the whole taxation system it will definitely lead into good governance and less corruption. So, this is actually one of the priorities, if not the priority of the US Chamber of Commerce in the DRC at this moment. And I would say, besides being the president of the Chamber of Commerce and the chairman of the board, I am also a director on the board of the Fédération des Entreprises du Congo; so we work jointly with the FEC to push forward the agenda of the streamlining of taxation in DRC.

Arthur Katalayi : And the DRC private sector being more based on mining, because we talked about mining a lot obviously and it’s understandable because it’s 80% of the economic resources of the country. What are the possibilities beyond the mining sector because Congolese talk a lot about mining?

Lino N’shimba : I think the first rule of investment is diversification. If you stay focus in only one thing, if you put all your eggs in one basket, if something happens you lose all your eggs. It’s a simple thing to understand. So if you do not diversify you will obviously run against a wall at some point. That is why I believe that Congo should not put all his focus into mining, and I think that president Tshisekedi has stated it very clearly. We want more agriculture, we want more energy, and we want mining as well but we need to have a process of diversification; we have here in the DRC amongst the most fertile land in the world. This is a country where you can eat a mango and you drop the core of the mango, “the noyau”, which grows by itself. You can understand that we have agricultural opportunities that go beyond our imagination.

Arthur Katalayi : Compared to countries like South Africa, it’s not in the culture, in a industrial way it’s not something engrained into Congolese minds.

Lino N’shimba : I do agree with you to a certain extent, but I think that the love of the land, the love of the country is something very important to have; because not everybody should be working in an office. In America for example back in the day, a long time ago, they used to give land, if you go Midwest we gave you ten hectares of land but you have to do agriculture. The country in this case Congo, the population is concentrated along the rivers. When you take a plane for example from Kinshasa to Lubumbashi, you could see that vast land is empty. And I believe if I am not mistaken that the ratio of population compared to land is about less than 50% of land occupied by the all population, if I’m not mistaken. So what do we do with the rest of the land?

Arthur Katalayi : Everybody wants to live around the same places …

Lino N’shimba : The love of the country is something that is key to the development of the country. When you love your country you start thinking of long term investments. You don’t think of an investment that is a short term investment where you have the gain tomorrow, or the day after. We need to invest in that proportion. And we have the means right here to do that. We don’t need Indians people to come and show us how to do agriculture. If we don’t get to that point I don’t think we’re going to take off economically. Because the effort can be put in mining at some point, mining will not give the same resources that it gives right now. You can look at the example of the countries that produce oil, right now they are diversifying into renewable energy etc; because the wall is nearing. You can do one thing but that one thing will come at an end at some point. And agriculture is something where people will always need food. The neighboring countries will always need food; the Congolese will always need food. So, it’s not something that will go away.

Arthur Katalayi : It’s a culture for countries such as Kenya, such as South Africa, or Tanzania, … it’s a culture that is there in people’s mind and their everyday activities … but not here.

Lino N’shimba : Loving the country means also educating people from an early age to understand the value of agriculture, to understand the value of renewable energy, to understand the value of mining, all these components, … but those are things that we need to start early on; and investing into people to understand the value of agriculture. I mean, it’s something that will always be with us. I will prefer not to drive my car but not go without food. It’s a daily necessity. And imagine that if you have an agriculture product, you sell it for 50 cent to one million people every day. Imagine the kind of wealth that you create; from that, the number of jobs that you’re going to create. And I do believe that we learnt from countries that already did it; see how they did it because we don’t need to reinvent the wheel. But at the same time we generate the funding from here. I think there is not a single agricultural bank here in DRC, I’m not aware of that. We need to start focusing on the things that can take the country and move it forward, but with the love of the country. 

Arthur Katalayi : And we talked about the business environment early on; you are one of the director of the board of the Fédération des Entreprises du Congo, and also of the American Chamber of Commerce. People complain a lot about the business environment; whose responsibility is that? Is that FEC? Is that the government? Is that a little bit of the two? How do you make an environment which is better for the economical operators that are actually operating here and now on the ground over potential investors who want to come into Congo; and they are not very confident aside of the corruption that is going on, into an environment where their capital is going to be secured?

Lino N’shimba : I think sitting on a table and starting a conversation is key. Because recently, we had members of our chamber, who saw new taxes imposed upon them without even any sorts of consultation. For example; in the telecommunication, Africell is a member of the chamber and it saw its taxes increased from 37% up to 53%. That is incredible, it is a provincial tax. It’s not a national tax. So before you get into taxing people, taxing companies you need to have some sort of conversation because then you will understand how you do it in conjunction with them telling you the impact that is going to follow them and on the people who are the client. We want the digitalization of the country; which will lead to good governance. But now, if we increase the taxes on telecoms the price tag of these taxes will be transferred to the clients. Then you’ll have less people involved in the digitalization and then we won’t move forward and we’re going to go backward. At FEC what we promote and what we would like to see is the enlargement of what we call in French “assiette fiscale” (fiscal plate), we need to make it bigger so we get more people involved and we don’t need to tax more of the same people who are already complaining. Because what will happen is that it’s going to scare them away and they going to go in unofficial channels, simply. So we need to make the plate of taxation and fiscality much bigger, much larger – but with fair taxes.

Arthur Katalayi : And it’s already the case with many companies that prefer to operate in an informal way because the Congolese taxes are not fair.

Lino N’shimba : Fair or not, the government has the right to do what it believes is correct in order to raise taxes, in order to get more money, into the treasury, but what we want is not penalizing the people who are already paying and ultimately penalizing the clients at large. Texaf which is a real estate company saw its taxes increase by 1000% from 2012 to now.

Arthur Katalayi : This is unheard anywhere in the world.

Lino N’shimba : We are talking about provincial taxes. So we are working with the government, having conversations in order to come to some compromise.

Arthur Katalayi : How do we justify such a spike in taxation?

Lino N’shimba : Unfortunately, I’m not a politician, I’m not the one who set the tax brackets, or the taxes hikes. But what I know in terms of business the more you tax people the less we’re going to have more businesses coming in, and the less we’re going to have people paying taxes because obviously they’re going to be asphyxiated at some point. They’re not going to have money that you want them to pay you. It’s a conversation to have with concrete actions to follow. As I said we are currently working with the Prime Minister’s office regarding these issues so we hope to get to some good compromises.

Arthur Katalayi : The show is called The Right Advice, what is one advice for an entrepreneur, one advice for an investor and one advice for a Congolese national person in an environment that is difficult and not easy to swim within, so to speak?

Lino N’shimba : I would say, sometimes I wonder, how and why Indians businesses are thriving? How and why Lebanese businesses are thriving? How and why Chinese businesses are thriving? You know it is called networking. These people get together. I will give you a simple example: I was getting involved into a company called Cinekin, into buying some shares in that company. And the owner who is also a friend of mine told me that at the beginning he could not find funding for his great idea because he brought cinema back to the Congo but he couldn’t find a single Congolese investor to invest into his venture. But he did find an Indian investor that gave him some money. So I told him why? We’re going to buy them out, and we’re going to move on. So we called the Indian guy and he said “no problem”. We gave him an offer he couldn’t refuse and he said “okay” with it. We gave him the papers and he was going to sign the exit, the good exit. And he says “I have to ask my partners”.  Okay, “pick up the phone, call them, right here, right now”. He said “No, there are 35”. 35 people put 2000$ each to get 70000$ in it. It’s called working together. Congolese entrepreneurs need to learn to work together. Money is not an issue. There’s a lot of money circulating. You only look at the number of luxury cars that you have in the streets that are brought in cash. People need to make their priorities straight and start forming some networking that will have them to work together and put their money together; we don’t even have a single Congolese bank! Do you believe that the money is missing here? Congolese cannot put 100 or 200 Congolese cannot put money together to fund a bank?

Arthur Katalayi : What is preventing them?

Lino N’shimba : The lack of working together because most people believe they can succeed individually while the success is a collective process. We can be ten people wanting to do an adventure, an enterprise that requires 1 million dollars. I don’t have 1 million but I have 200000$ for example, you don’t have 1 million but you have 400000$, he doesn’t have 1 million but he has 150000$. When you put 10 people together the millions become an easy thing to get; because each one just put in a 100 thousand dollars. You understand? But individually, we will never be able to get that jump start; because we simply don’t have individually the means. Why don’t we think of doing collectively things to move the needle? So, I would say to Congolese entrepreneurs because there are so many of them there are so many talented ones let’s learn to work together here.

Arthur Katalayi : That’s a great advice. And I believe that is the fitting advice to conclude this show, thank you very much.

Lino N’shimba: No, thank you, thank you for having me and I hope it’s not the last time to be on this show.

Arthur Katalayi : Of course it’s not the last time. Thank you very much and have a good day and all the best for American Chamber of Commerce here and the businesses that you are in.

Lino N’shimba : Alright.