A COLLEAGUE recently attended an international investment conference in Morocco and reported that some of the statistics about Africa were way off the mark. Nigeria, one expert said, had 200-million urbanised people. Actually, the country’s total population is about 160-million, about half of whom are urbanised.

Another expert claimed that intra-African trade had risen from 5% of total African trade in 2000 to 25% this year. This is more than double the generally accepted figure of about 12%. This raises questions about how many incorrect statistics — and opinions — are making their way into companies’ business plans. With Africa increasingly on the global investor map, there are many new "experts" talking up the opportunities. Analysts who, just a few years ago, could not tell you how many Congos or Guineas there were or name one African-owned company outside South Africa, now charge hefty fees to advise clients on their Africa strategies.

There is no doubt that growth trends are positive. For example, a recent World Bank report says 38 sub-Saharan countries could be middle-income states by 2025.

But many of the statistics that excite investors are coming off a low base, with definitions massaged to push the growth story. There are also still many challenges that may yet dent ambitious growth prognoses. Countries such as Nigeria, Mali and Kenya face rising levels of terrorism, while Zimbabwe is struggling to make ends meet after a decade of abuse by its leaders. Although capital is being earmarked for Africa as other opportunities contract, there are not many countries that have the capacity to absorb sizeable inflows, nor to leverage them for broad-based growth.

While urbanisation presents opportunities, the reality is also that many of Africa’s large cities are sprawling entities with large areas of squalor that are barely touched by municipal services.

High growth in consumer-facing industries is being touted as a big drawcard for investment. In Nigeria, the experts predict 1,000% growth in retail sales per person by 2016. But reliable statistical information about incomes, personal expenditure and other related issues are hard to find, raising questions about whether the growth of Nigeria’s middle class is, in fact, overstated.

While risk levels have reduced, new and often more complex and insidious risks have emerged as companies try to keep up with changing government priorities and an increasing array of corporate governance principles.

Some of the high growth rates used to highlight Africa’s performance are in undiversified, resource-rich economies. Despite the opportunity that resources offer for sustainable growth, few African governments have got this right. The World Bank says poverty has increased in countries such as Angola and Gabon.

There is no doubt there are many positive trends in Africa and these should be celebrated. But it’s risky to ignore the realities. On the one hand, investors may find conditions on the ground a far cry from what the business plan crafted in an air-conditioned office in a far-off city offered. The growth statistics hide high poverty levels, poor infrastructure, overzealous bureaucracy, shallow markets and small populations with little spending power, for example.

The blame for failure is usually apportioned to difficult conditions in the host country rather than the investment strategy.

On the other hand, danger lurks in African governments starting to believe the hype. This may have the unintended consequence of diverting policy makers from reforming the dysfunctional operating environments that continue to add to the cost and difficulty of investing in Africa.

• Games is CEO of Africa At Work, an African business consultancy. Her new book, Business in Africa: Corporate Insights, will be launched in South Africa on Tuesday.