* Host is a microcosm of challenges to African nation states
* Nigeria grappling with Islamist revolt, communal violence
* Blast on Thursday kills several, follows April 14 attack
* Africa conflicts cast pall over ebullient growth story
* Nigeria: a "failing state" or "democracy in raw form"? (Updates with latest suspected bomb attack on edge of Abuja)
By Pascal Fletcher
ABUJA, May 1 (Reuters) - Delegates to the World Economic Forum on Africa next week in the Nigerian capital Abuja will be in the right place to reflect on the rising continent's problems, as well as its undoubted potential.
Participants, including Chinese Premier Li Keqiang and African leaders, meet as the continent's largest economy grapples with a surging Islamist revolt and inter-communal clashes that highlight poverty, ethnic and religious schisms, and battles over power and resources in many parts of Africa.
"If people want to take a look at a dynamic, high-potential place in Africa, Nigeria is that place, but it also has a whole host of issues that are not going away anytime soon," said Mark Shroeder, head of Sub-Saharan Africa analysis at business and security consultancy STATFOR.
Policymakers, entrepreneurs and philanthropists attending the 24th World Economic Forum on Africa (WEFA), a replica of the flagship annual WEF held in Davos, Switzerland, will be ensconced in the concrete fortress of the Abuja Hilton, protected by 6,000 police and soldiers - the largest security operation Nigeria has ever mounted for a summit.
An April 14 bomb blast on Abuja's outskirts, which killed at least 75 people and was claimed by the radical Islamist group Boko Haram, triggered the big security shield for an event which is normally the setting for convivial and relaxed discussions.
But despite the announced security cordon around the city, another suspected bomb exploded on Abuja's outskirts on Thursday, killing and injuring several people.
The Hilton's air-conditioned marble interior may also not drown out the desperate public appeals of parents of some 200 teenage schoolgirls snatched by suspected Boko Haram militants from a northeast school in a mass abduction last month.
The incident has shocked Nigeria, triggered protests in Abuja and embarrassed President Goodluck Jonathan's administration, showing up the military's inability to contain a ruthless anti-government insurgency whose targets also include Christian churches and civilians of all races and creeds.
Nigeria's combustible ethnic, religious and regional faultlines, fanned by the political winds of an upcoming election 10 months away, are the legacy of its artificial creation by former colonial masters.
In this, the West African giant, which recently replaced South Africa as the continent's biggest economy through a rebasing of its GDP, can be seen as a microcosm of the post-independence pains and trauma of other struggling African nation states - such as South Sudan and Central African Republic.
The World Economic Forum on Africa on May 7-9 will include a session on emerging security threats which are casting a pall on Sub-Saharan Africa's otherwise ebullient economic promise as it snaps at the heels of Asia as the world's second fastest-growing region.
Nigerian Finance Minister Ngozi Okonjo-Iweala told Reuters that the meeting's chosen theme - "Forging Inclusive Growth, Creating Jobs" - was as relevant to Nigeria as to the rest of Africa.
The continent's most populous nation, Nigeria has tens of millions of poor, many of them unemployed, restless youth, who could pose a real threat to stability if neglected and left without a future.
These masses of underprivileged and excluded from Africa's natural wealth, such as Nigeria's oil, offer potential recruits to Boko Haram and other radical or insurgent groups which often arise from, or take advantage of, these social inequalities.
Okonjo-Iweala has acknowledged "an inclusion problem" as one contributing factor behind Boko Haram.
So while Jim O'Neill, the former Goldman Sachs analyst who coined the BRICs (Brazil, Russia, India, China), sees Nigeria as a "fantastic story" and has included it as one of the most powerful newly emerging MINTs (Mexico, Indonesia, Nigeria and Turkey), others like West Africa expert Gilles Yabi fear it could be a "giant with feet of clay".
Former International Crisis Group analyst Yabi wrote in recent blogs that Boko Haram was a monstrous product of bad governance illustrating "the failure of the attempt to construct a Nigerian society founded on common values".
WEFA's Nigerian hosts are keen to keep the focus positive.
"We've not had any cancellations, which is amazing to us," Okonjo-Iweala said.
Delegates are also expected to include former Brazilian President Luiz Inacio Lula da Silva, former British Prime Minister Gordon Brown, former U.N. Secretary-General Kofi Annan and U.S. Trade Representative Michael Froman.
Participants will swap views of Table Mountain and the azure sea in Cape Town, South Africa, the venue for most previous WEFs on Africa, for the sight of Aso Rock - a stark erosion-streaked outcrop that dominates the surrounding African bush and stands guard over the Nigerian presidential complex.
"Participants will not have a problem with security during the summit," President Jonathan said in a statement aimed at reassuring WEFA attendees.
Boko Haram leader Abubakar Shekau had a chillingly different message in a video released to some media in which he claimed responsibility for last month's bombing of the bus station on the edge of the federal capital of Africa's No. 1 oil producer.
"Look at us, we are right within your city, and you don't even know how to find us," Shekau taunted Jonathan.
One figure who will be absent next week will be Nigerian central bank governor Lamido Sanusi, suspended by Jonathan in February after he denounced that up to $20 billion of state oil revenues had failed to be paid into the national treasury.
Widely respected internationally as an anti-corruption reformer, the urbane northern aristocrat had been a regular at Davos. He told Reuters in Abuja this week he would be staying away from the "African Davos" in his own country.
Nigeria's presidency, which has disputed his denunciations of missing oil revenues as exaggerated, said he was suspended for "recklessness" at the central bank. Sanusi has a different story: "It's all about shooting the messenger," he said.
"If you were to look at objective criteria, you would say that Nigeria is a failing state," he said. Finance Minister Okonjo-Iweala prefers to talk about "democracy in raw form".
That may be small comfort to the relatives of the abducted schoolgirls, who want the military to do more to find them.
"We're talking about the lives of 200 innocent girls," said Lawan Abana, who has a sister and two nieces among the missing. (Additional reporting by Tim Cocks and Felix Onuah; Editing by Tim Cocks and Susan Fenton)