(a) Explain the following strategies of industrialization: (i) import substitution (ii) export promotion (b) Highlight any four objectives of industrial dev...

Answer Details

(a) Two strategies of industrialisation.

(i) Import substitution. This is a strategy in which a country builds local industries to produce goods that were formerly imported, so as to satisfy the domestic market from home production. It is usually protected by tariffs, quotas and import bans on the affected goods. Its aims are to save foreign exchange, create local employment and reduce dependence on foreigners; its weakness is that the industries often stay small, high-cost and dependent on imported inputs.

(ii) Export promotion. This is a strategy in which a country deliberately develops industries to produce goods mainly for export to earn foreign exchange. Government supports it with incentives such as export subsidies, tax reliefs, favourable exchange rates and export-processing zones. It exposes firms to world competition, encourages efficiency and earns foreign exchange, though it can be vulnerable to unstable world markets and trade barriers abroad.

(b) Four objectives of industrial development programmes in Nigeria.

1. To create employment and reduce unemployment.
2. To diversify the economy and reduce over-dependence on a single product such as crude oil.
3. To promote local processing of raw materials and add value to primary products.
4. To conserve and earn foreign exchange (by substituting imports and promoting exports).

Other valid objectives include developing local technology and skills, and encouraging even regional development.

Examination reminder: contrast the two strategies directly: import substitution looks inward at the home market, while export promotion looks outward at foreign markets.