On import substitution in nigeria ogbonna 1976 south. Import substitution industrialization isi definition. Import substitution industrialization is an economic policy sometimes adopted by developing nations that seek to make their economies selfsufficient. Despite the merits of import substitution and protectionism of local industries, choosing such an economic approach underscores a lack of clear economic vision. Monetary policy and nigeria s quest for importsubstitution industrialization. Feasibility and path towards reduced import content.
Conversely, the inward looking development policies stressed the need for developing countries like nigeria to evolve their own style of. Import substitution industrialisation and economic growth. This was successful for british commercial interests in ghana and nigeria, which saw a 20fold. The reality, of course, was a completely different matter. Obinna for helpful comments on an earlier version of this paper. This chapter chronicles the evolution of industry in ghana over the postindependence era from an inward overprotected isi strategy of 196083 to an outward liberalized strategy during 19842000, and since 2001, to the private sectorled accelerated industrial development strategy based on valueaddition. This policy was intended to promote industrialization by protecting domestic producers from the competition of imports. In other words, are import substitution policies the. Trade policy reform among ecowas countries import substitution industrialization isi strategies were at the heart of many developing countries development strategies during the 1960s and 1970s. The role of importsubstitution industrialization policy in economic development in nigeria m o nyong c d ekpenyong doi. The nigeria export policy statements of encouraging indigenous firms local products export appear to be at least encouraging, but the. In nigeria, import substitution and industrialization strategy has been pursued vigorously since the late 1950s. The role of the government in promoting industrialization.
Import substitution industrialization henceforth isi was adopted in nigeria as far as back as 1960 ndebbio, 1994 and persisted till 1985 bushari, 2005. Challenges and opportunities daibi w dagogo, department of banking and finance, rivers state university of science and technology, nigeria. A disaggregate analysis of importation and exportation is conducted using a time series data between the. Pdf on sep 29, 2010, thomotuya, vincent chinyere thomotuya and others published the role of import substitution industrialization policy in the economy of nigeria. The policy implications of this report are centered on the strategy for import substitution followed in nigeria. Export promotion, import substitution and economic. In the first half of the 1960s, tanzania, zambia, and nigeria began to imple ment the import substitution industry on a large scale. Most economists and policymakers view ldcs as consisting of large traditional and modern sectors. Myths and realities in strategy and development kwan s.
Monetary policy and nigerias quest for importsubstitution industrialization. Indian authorities were pessimistic of the countrys ability to boost its export earnings and decided to embark on an import substitution policy. Industrialization in subsaharan africa and import substitution policy. Realizing the obvious pitfalls of the import substitution policy, nigeria added the policy of export promotion. The current import substitution strategy in nigeria seems to be borne out of fear and capricious. The former may be interpreted correctly as identifying policies that are directed towards the reduction of imports by for instance tariffs and their substitution by domestic production. Pdf export promotion, import substitution and economic. In this article we will discuss about import substitution and export promotion. The year 1979 marked the beginning of the second attempt at democratic governance.
The role of importsubstitution industrialization policy in economic development in nigeria. On paper, import substitution was a brilliant policy that could conceivably kill several economic birds with one stone. It gives us a sense of the historical backdrop to contemporary policy and also locates one end of the policy spectrum with respect to the role of the state in development against which we can evaluate current practices. The needs focuses on strategy and policy directions rather than programmes and projects. Import substitution industrialisation strategy isi involves producing locally, goods that were formerly imported. John okah2 1department of finance and banking, faculty of management science, university of port harcourt, port harcourt, nigeria 2port harcourt north development office, first bank of nigeria limited, port harcourt, nigeria abstract. Policy failure can be experienced at two different levels. The korean miracle 19621980 revisited kellogg institute. Complete report in english official version of document may contain signatures, etc official pdf, 44 pages 1. Import substitution has been a prevailing strategy for spurring economic growth in developing countries since it was first theorized in the 18th.
Monogbe and others published export promotion, import substitution and economic integration in nigeria find, read and cite all the research you need on researchgate. Industry in ghana is mainly dominated by micro and small firms, privately owned and. The second reason for the increasing dominance of fiscal policy in the management of the economy is the fall in the international price of oil in the late 1980s. Nigeria remains a major industrial country in the west african subregion and. The role of importsubstitution industrialization policy. Import substitution industrialization looking inward for. On import substitution in nigeria, the south african. Nigeria trade policy, export development, and investment.
European scientific journal april 2016 edition vol. The longer isi prolonged the more foreign borrowing was demanded. This pdf is a selection from an outofprint volume from the national bureau of economic research. Senior lecturer in economics, university of nigeria, nsukka. Nigerias protectionist and import substitution strategy of import bans, quotas, and the restriction of foreign exchange allocation to the importation. Industrialization in africa and emerging asia thursday, november 20, 2014.
The common terminology of import substitution and export promotion can be misleading. In others, although no more than five or six, product diversification has become a significant characteristic of the industrial base. Import substitution and export promotion economics. O 2008 a critical appraisal of the import substitution industrialization policy in nigeria nigeri journal of business vol.
On import substitution in nigeria on import substitution in nigeria ogbonna, m. This page provides nigeria imports actual values, historical data, forecast, chart, statistics, economic calendar and news. Import substitution industrialization isi is a trade and economic policy which advocates. Isi is a trade and economic policy that advocates replacing foreign imports with. To encourage and implement this policy the nigeria export promotion board nepb was established. Understanding import substitution industrialization is an important step in unraveling the puzzle of latin american development.
This involves the production and exportation of new products and those originally increased. The industrial sector accounts for 6 per cent of economic activity, while in 2011, the manufacturing sector contributed only 4 per cent to gdp. The importsubstitution strategies adopted were meant to produce locally the consumer goods which had. The role of importsubstitution industrialization policy in economic. Conceptual relevance of import substitution industrialisation the isi policy initiative has been faced with various criticisms over the past decades. Export promotion, import substitution and economic integration in nigeria tunde g. The process where a nation manufactures locally those commodities that were formally imported from how to cite this paper. Nigerian industrial development between 1943 and 20.
This paper empirically integrates the interplay between import substitution and export promote on the nigerian economy in conjunction with the theoretical position of the protectionist and the free trade activist and how this has helped in promoting the nigerian economy over the years. Protection, in the form of high tariffs or the restriction of imports through quotas, was applied indiscriminately, often to inherently. It will include both previous imports and nonimports. Government strategy that emphasizes replacement of some agricultural or industrial imports to encourage local production for. Hence development has come to be seen as a process of contracting the traditional sector and its growthretarding institutions in favour of a growing modern industrial sector. Impact of industrialization in nigeria pdf paperity. Import substitution as sustainable economic development. Also since the 1970s, nigeria has instituted various import substitution policies in the form of import prohibitions on food products to no effect. Import substitution policieswidely used in the 1950s.
The regime advocated economic selfsufficiency through a policy of import substitution, which selectively but extensively, encouraged local industry via exorbitant import quotas. However, a new set of initiatives that focus on boosting agricultural productivity from within the sector have shown to be more effective policy tools. Kim is professor of economics and departmental fellow of the kellogg institute at the. Nigeria indeed saved some forex with the import ban, but that is barely a footnote today. The postwar economy was dominated by the oil sector, with industrial policy focused on import substitution is. Industrialization is the process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods.
Tdp 72008 import substitution and export promotion as. The policy initiative was and still is criticised by some neoliberal advocates more noticeably in the 1970s and 1980s balassa, 1971. Development strategy for nigeria shaping policy for. In this study, import substitution is defined as a deliberate industrial policy adopted by governments to establish domestic industries to produce goods that previously were not produced domestically.
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