88% of Japanese firms in Africa worried about political instability: 2012 poll

Kyodo

Some 88 percent of 168 Japanese companies in Africa that responded to a Japan External Trade Organization survey said they are worried about political and social instability on the continent.

The findings of the poll, which was conducted between August and October last year, showed Wednesday that the number of Japanese firms fearful of such instability in Africa jumped 15.7 percentage points from the previous survey in 2007.

The rise could in large part be attributable to the turmoil stemming from the Arab Spring uprisings that swept North Africa from early 2011, toppling long-ruling dictatorships in Egypt and Libya, among other countries in the region.

Shintaro Matoba, who heads JETRO’s Middle East and Africa division, told a news conference he believes Japanese firms will refrain from expanding their business activities in Africa for a while following last week’s deadly Algerian hostage crisis at a gas complex, in which nine Japanese nationals were killed and one still remained missing as of Thursday.

In a multiple-choice question on the difficulties of managing businesses in Africa, political and social instability topped the list, followed by local legislation and the implementation of regulations and laws, cited by 77.7 percent of the 168 firms polled, as well as employment and labor issues, referred to by 72.3 percent of the respondents.

Meanwhile, 67.3 percent of the firms said they believe Africa will become more important for their business activities on the back of expanding markets and favorable demographic growth trends.