This involves the production and exportation of new products and those originally increased. Isi is a trade and economic policy that advocates replacing foreign imports with. Import substitution industrialization isi is a trade and economic policy which advocates. Feasibility and path towards reduced import content. Impact of industrialization in nigeria pdf paperity. It will include both previous imports and nonimports. Nigeria indeed saved some forex with the import ban, but that is barely a footnote today. Development strategy for nigeria shaping policy for. The nigeria export policy statements of encouraging indigenous firms local products export appear to be at least encouraging, but the. The economic transformation agenda, otherwise known as nigeria vision 20. The needs focuses on strategy and policy directions rather than programmes and projects. Import substitution industrialisation and economic growth.
On import substitution in nigeria on import substitution in nigeria ogbonna, m. The role of importsubstitution industrialization policy in economic development in nigeria m o nyong c d ekpenyong doi. This pdf is a selection from an outofprint volume from the national bureau of economic research. Tdp 72008 import substitution and export promotion as. On import substitution in nigeria, the south african. Nigerias protectionist and import substitution strategy of import bans, quotas, and the restriction of foreign exchange allocation to the importation.
However, a new set of initiatives that focus on boosting agricultural productivity from within the sector have shown to be more effective policy tools. Import substitution policieswidely used in the 1950s. 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. 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. Export promotion, import substitution and economic integration in. The current import substitution strategy in nigeria seems to be borne out of fear and capricious.
Protection, in the form of high tariffs or the restriction of imports through quotas, was applied indiscriminately, often to inherently. Realizing the obvious pitfalls of the import substitution policy, nigeria added the policy of export promotion. This was successful for british commercial interests in ghana and nigeria, which saw a 20fold. Export promotion, import substitution and economic. Policy failure can be experienced at two different levels. Obinna for helpful comments on an earlier version of this paper. Government strategy that emphasizes replacement of some agricultural or industrial imports to encourage local production for. Conceptual relevance of import substitution industrialisation the isi policy initiative has been faced with various criticisms over the past decades. Industrialization in africa and emerging asia thursday, november 20, 2014. Pdf export promotion, import substitution and economic. Pdf on sep 29, 2010, thomotuya, vincent chinyere thomotuya and others published the role of import substitution industrialization policy in the economy of nigeria. Industry in ghana is mainly dominated by micro and small firms, privately owned and. Indian authorities were pessimistic of the countrys ability to boost its export earnings and decided to embark on an import substitution policy. A disaggregate analysis of importation and exportation is conducted using a time series data between the.
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. 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. Understanding import substitution industrialization is an important step in unraveling the puzzle of latin american development. The process where a nation manufactures locally those commodities that were formally imported from how to cite this paper. The policy implications of this report are centered on the strategy for import substitution followed in nigeria. Import substitution has been a prevailing strategy for spurring economic growth in developing countries since it was first theorized in the 18th. The postwar economy was dominated by the oil sector, with industrial policy focused on import substitution is. Import substitution industrialization looking inward for. In the first half of the 1960s, tanzania, zambia, and nigeria began to imple ment the import substitution industry on a large scale. The reality, of course, was a completely different matter.
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 korean miracle 19621980 revisited kellogg institute. Import substitution industrialization is an economic policy sometimes adopted by developing nations that seek to make their economies selfsufficient. 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. The role of the government in promoting industrialization. Import substitution industrialisation strategy isi involves producing locally, goods that were formerly imported. O 2008 a critical appraisal of the import substitution industrialization policy in nigeria nigeri journal of business vol. On paper, import substitution was a brilliant policy that could conceivably kill several economic birds with one stone. The regime advocated economic selfsufficiency through a policy of import substitution, which selectively but extensively, encouraged local industry via exorbitant import quotas.
European scientific journal april 2016 edition vol. Myths and realities in strategy and development kwan s. Industrialization in subsaharan africa and import substitution policy. Industrialization is the process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods. This policy was intended to promote industrialization by protecting domestic producers from the competition of imports. The role of importsubstitution industrialization policy. Senior lecturer in economics, university of nigeria, nsukka. Challenges and opportunities daibi w dagogo, department of banking and finance, rivers state university of science and technology, nigeria.
Monogbe and others published export promotion, import substitution and economic integration in nigeria find, read and cite all the research you need on researchgate. Most economists and policymakers view ldcs as consisting of large traditional and modern sectors. 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. Trade policy reform, regional integration and export.
The role of importsubstitution industrialization policy in economic development in nigeria. 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. To encourage and implement this policy the nigeria export promotion board nepb was established. In nigeria, import substitution and industrialization strategy has been pursued vigorously since the late 1950s.
This page provides nigeria imports actual values, historical data, forecast, chart, statistics, economic calendar and news. The longer isi prolonged the more foreign borrowing was demanded. Import substitution as sustainable economic development. The year 1979 marked the beginning of the second attempt at democratic governance. Monetary policy and nigerias quest for importsubstitution industrialization. Import substitution industrialization isi definition. The policy initiative was and still is criticised by some neoliberal advocates more noticeably in the 1970s and 1980s balassa, 1971. Complete report in english official version of document may contain signatures, etc official pdf, 44 pages 1. Import substitution industrialization henceforth isi was adopted in nigeria as far as back as 1960 ndebbio, 1994 and persisted till 1985 bushari, 2005. 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. Nigeria trade policy, export development, and investment. Also since the 1970s, nigeria has instituted various import substitution policies in the form of import prohibitions on food products to no effect. Export promotion, import substitution and economic integration in nigeria tunde g.
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. The role of importsubstitution industrialization policy in economic. In other words, are import substitution policies the. The common terminology of import substitution and export promotion can be misleading. The importsubstitution strategies adopted were meant to produce locally the consumer goods which had. 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. Nigeria remains a major industrial country in the west african subregion and. Conversely, the inward looking development policies stressed the need for developing countries like nigeria to evolve their own style of. Kim is professor of economics and departmental fellow of the kellogg institute at the. Nigerian industrial development between 1943 and 20.