Untapped Continent By Neelima Meermira Africa for the investor is like a story of boom and bust, where famine and disease are punctuated by coups and civil wars. For many, its tales of war and diamonds, tribal rivalries, plundered treasuries and secret Swiss bank accounts make it too risky. Africa is the world's second-largest and second most-populous continent, after Asia. Although the Dark Continent has abundant natural resources, Africa remains the world's poorest and most underdeveloped continent, due to a variety of causes that may include the spread of deadly diseases and viruses), corrupt governments that have often committed serious human rights violations, failed central planning, high levels of illiteracy, lack of access to foreign capital, and frequent tribal and military conflict (ranging from guerrilla warfare to genocide). According to the United Nations' Human Development Report, the bottom 25 ranked nations were all African. Somalia is fast approaching its third decade without a functional central government, and the prolonged ill-health of Nigerian President Umaru Yar'Adua has created a troubling power vaccuum in Africa's most alluring frontier market. But after the implosion of such supposedly sophisticated or promising institutions as Lehman Brothers or Dubai World, the confidence of the Zambian hairdresser is finding echoes as far away as London, New York and Beijing. The International Monetary Fund believes growth in sub-Saharan Africa will be 1 percentage point above the global average, and puts eight African countries in its top 20 fastest-expanding economies in 2010. Oil-rich Angola and Congo Republic will lead the charge with growth rates of more than 9 and 12% respectively, both beating China, according to the IMF's most recent projections. For some African countries, particularly those helped by Chinese investment and its thirst for energy and minerals, another boom may be approaching. Investors with cheap cash needing to spice up returns in more obscure parts of the globe are asking whether Africa can shift from final investment frontier into the emerging market mainstream. Reflecting this interest, Africa gets top billing at the annual meeting of the rich and powerful in Davos in early 2010. The Africa of old aid-dependent, and with large tracts of the economy controlled by corrupt and capricious governments has not disappeared. But for all the previous false dawns, there is a growing belief that the continent home to 53 countries, a rapidly urbanising young population of a billion people and as much as a third of the world's natural resources is changing. Rash Days That is not to say it will be a smooth ride. Eric Chirwa, a 40-year-old miner, can tell you what a tough year it's been in Luanshya: its century-old copper mine was mothballed in the depths of the global slump, leaving 1,700 miners out of work and at the mercy of the banks with whom they had racked up huge debts in the boom years. He's been tracking world copper prices on a daily basis, and has seen them rebound: “In the past, we never used to know the copper price,” he said. “Now I'm checking the price every day in the internet cafe.” Internet access is one aspect of the technology driving changes in Africa that go far beyond letting a miner anticipate fluctuations in copper prices. In central Africa, Rwanda a republic more widely known for the genocide of 800,000 Tutsis and moderate Hutus has invested heavily in broadband and is promoting itself as a business services hub. Far more visible, of course, is the cell phone. One person in three has one: in 2007 Africa had 270 million of them, according to industry association GSMA, up from 50 million in 2003. The uptake shows little sign of slowing as five years of annual growth above 5% swell the middle classes. Mobile money transfer systems such as M-PESA from Kenya's Safaricom have allowed people with no bank accounts still the vast majority to ping money to each other for a fraction of the cost of transfers or a bus ride to deliver cash. The system has evolved to incorporate an array of payments from taxi fares to food, drinks and movie tickets, making it possible to spend a whole day in Nairobi without carrying cash. Cities, towns and villages are cluttered with billboards advertising the latest cell phone service or gimmick. The determination with which India's Bharti Airtel unsuccessfully pursued an alliance with South Africa's MTN, the continent's dominant cell phone operator, shows the perceived value in the world's last major mobile growth market. East Hand Back in Zambia, where a rumbling procession of trucks laden with high explosives and earth-movers is bringing the Copper Belt back to life, the government has sold some of the closed mines to foreign buyers: Luanshya's new owners are, predictably, Chinese, in step with another major shift in the continent. China Non-Ferrous Metals Corporation took over in the middle of 2009 and officially started production in December with around 2,500 staff on its books more than at the height of the recent boom. The Indian Connection Sample this: Every sixth person in Egypt uses a Marico product, Luminous inverters light up most African homes during power cuts and Rasna is a favourite drink of kids living in that part of the world. While the world's biggest consumer brands are turning to China and India for growth, a host of Indian companies have started making inroads into African countries. Power solutions provider Lumi- nous recently won a pilot project from a South African telecom giant to prune power consumption (and costs) for its telecom towers. Kalindee Rail Nirman, a small company operating out of Gurgaon which takes up signalling and track laying projects for the Indian Railways and the Delhi metro, has been roped in by authorities in Ghana to carry out a study of its ageing railway network for future upgradation. There's more. Karuturi Networks, a rose grower from Bangalore, has become the biggest private sector land owner in Africa and even owns a top football club in Kenya! Most African countries represent what management guru CK Prahalad has famously christened the bottom-of-thepyramid (BoP) consumers, who may spend less on a product but collectively make up a huge consumption base that marketers cannot ignore. “African growth of GDP, capital accumulation, and FDI have been higher than the global average in the period 1996-2007,” says Sanjay Kirloskar, chairman of the Africa Committee at the Confederation of Indian Industry (CII). Adds Piruz Khambatta, chairman, Rasna International: “It's a cost-conscious and low SKU (stock keeping unit) market.” It's a market where distribution and logistics is a big issue, and the marketing machinery is not developed yet. Mr Khambatta has created products that have longer shelf life. “In most African markets we are number two or three,” says Khambatta, who has launched advertisements in local languages. Many companies have chosen the acquisition route to get a foothold in these markets. Rose grower Karuturi acquired rose plantations in Kenya, a deal that catapulted it into the world's biggest rose grower in one go. Last year, the company acquired more land in Ethiopia and has been given land on long lease in Gambella for farm development. FMCG firm Marico too entered the Egypt market by acquiring brands like Hair Code two years ago. Today, it has close to 60% share of the hair styling market in the country. The company's chief executive of the International Business Group (IBG) Vijay Subramaniam estimates that its brands in South Africa-Caivil and Black Chic range of hair care products and the Hercules range of health care products-command 8-10% of the ethnic hair care space.