Waste Matters - Page 2 of 2

Waste Matters

Loba TéléCom, which operates six telephone and Internet stores in Kinshasa. “One is run by my brother, another by my sister, a third by a cousin, and the others by a distant cousin and her five children,” says Mbemba, who manages the venture remotely.

And although family ties have made it easier for Mbemba to launch his new business in Africa, he says business opportunities exist for those who wish to venture there. But he cautions, “You need a person of trust in Africa who is capable of thinking along business-management lines. The investor will lose up to 40% of his venture capital if he does not have such a person. Most investors end up bankrupt within the first six months because they shoot for quick gains and invest all their capital to expedite the process. Equity capital should never exceed 30% of the total investment. A start-up and development team should be brought in to oversee the project for the next few months, or even years. Only then will investment in African countries be profitable mid- or long-term.” But Mbemba adds that because of “red tape and corruption,” a waste of 30% has to be taken into account. “This shrinkage is considered absolutely normal.”