JOHANNESBURG If you want to ride Africa's business boom, choose your country well and be ready for bumps on the road. But the momentum is upward and you will be rewarded if you stay the course.
African policy-makers and chief executives of companies operating in Africa are spreading this upbeat message, qualified with some caveats, as interest in what was once dubbed the "hopeless continent" blossoms along with growth rates.
Few doubt that the Africa Rising narrative, which has grabbed the attention even of traditional skeptics, is based on solid fundamentals: growth outpacing most of the world, a rising young population of workers and consumers and global demand for the continent's commodities.
"I absolutely believe in a consistent upward trend," said Diana Layfield, Chief Executive Officer for Africa of Standard Chartered, the London-listed bank which is investing $100 million in Africa to double its business in the next five years.
But this bullish pitch for Africa, enthusiastically echoed by most participants at a Reuters Africa Investment Summit this week, comes accompanied with a caution that the continent remains a volatile, uneven and challenging place.
"If you were to compare it to the emergence of some markets in Asia, you'll see ... more bumps in the road," Layfield said.
While hubs like Nigeria and Kenya project the continent's potential, pockets of instability and flickering violence in old and new hotspots such as Democratic Republic of Congo, Mali and, more recently, Mozambique, serve as a constant reminder of a turbulent track record.
Investors in the continent of 54 states - most of them south of the Sahara - must also get to know the different markets, cultures, and regulatory frameworks. That makes it distinct from fast growing Asian giants India and China.
"With the best will in the world, nobody can be a good investor across 44 countries," said Marlon Chigwende, Managing Director of the Carlyle Group's $500 million Sub-Saharan Africa Fund, which has just signed its second deal.
"But we think with a focused strategy you can make very good risk-adjusted returns in Africa."
Even in the short term, some investors are seeing returns: stock markets in Nigeria and Kenya, west and east Africa's biggest economies, are both up more than 20 percent this year after significant gains last year.
"A WHOLE DIFFERENT STORY"
Cheerleaders of the rising Africa message stress that it is not just an economic growth story.
Sub-Saharan Africa's expected GDP growth - forecast at 5.8 percent this year by the African Development Bank - is the envy of much of the world as parts of the developed West struggle to climb out of recession.
But Africa-watchers say the continent is also marching forward across metrics ranging from democracy and governance to economic management and the rule of law.
"Those basic fundamentals are either in place or getting better," said Clifford Sacks, CEO for Africa of Renaissance Capital, the Russian investment bank which has been a pioneer in opening up the business frontier in Africa.
Sacks and others said the old investors' view of Africa as a pool of oil and minerals to be tapped as a resource play - while still significant, especially for big commodities buyers like China - is not the full picture.
Mining represented only 14 percent of Africa's growth while 53 percent came from services such as banking and telecommunications, according to data for the 2002-2009 period provided by Renaissance.
"When you peel back the onion a bit on growth ... two thirds - and that is what really attracts us - has been consumer driven," said Carlyle's Chigwende. He said his group, the world's second largest private equity asset manager, was focusing on fast-growing sectors like food, consumer goods, telecoms, especially mobile telephony, and banking.
PRODUCE, NOT JUST CONSUME
There is broad consensus, however, that African governments must seize the opportunity of rising growth and investment if they want to make sure benefits reach populations clamoring for jobs and better lives.
Investing resource income and other revenues in infrastructure, education and health is essential, said Johan Van Zyl, Toyota Motor Corp.'s CEO in Africa.
"We have a young population in Africa. It needs to be absorbed into the economy, whether informal or formal, and job creation is going to be critical," he said.
"Africa will not just have to be a consumer continent, but also a producing continent."
Manufacturing is still scarce across Africa, concentrated in the most developed economy, South Africa, where growth currently lags that of the wider continent.
The continent's share of manufacturing in its aggregate output actually declined between 1980 and 2010, from more than 12 percent to 11 percent, according to a report from the U.N. Economic Commission for Africa and the African Union.
In contrast, this share in East Asia topped 31 percent, they lamented, urging African governments to promote "economic transformation through commodity-based industrialization".
To really bring job-creating investments, African governments should above all avoid abrupt changes to laws that move the goalposts for investors, Renaissance's Sacks said.
"There is a pool of capital that sloshes around the globe," he said "If you want to be competitive, you have to put a globalization hat on."
Held up as a star performer in the 1980s and 1990s, Zimbabwe showed how badly things can go wrong during a decade of economic collapse rooted in politics that were only reversed when rivals agreed to share power after a violent election in 2008.
"Predatory politics" still impede Zimbabwe's rise on the tide lifting Africa, Finance Minister Tendai Biti told Reuters, saying elections planned for this year would be crucial.
Even Nigeria, Africa's top oil producer, combines a racing economy with serious security challenges, including a persistent and bloody northern insurgency by Islamist sect Boko Haram and worries of renewed troubles in the oil-producing south.
But Layfield said the Nigerian market had its own multi-faceted resilience. "For it to really go backwards, you need really a lot of things to go wrong at the same time," she said.
"One interesting characteristic about African markets - they absolutely reward long-term commitment," she added.
(For other news from Reuters Africa Investment Summit, click here)
(Additional reporting by Benon Oluka and Zandi Shabalala; Editing by Matthew Tostevin)