Post-independence industrialization policies in Nigeria heavily favored the Import Substitution Industrialization (ISI) strategy to reduce dependence on foreign consumer goods. Which of the following represents a key structural weakness associated with this strategy?
- Continued reliance on imported capital equipment and intermediate inputs, creating severe foreign exchange shortagesAnswer
- BRapid expansion of non-oil exports to competitive global markets due to domestic efficiency gains
- CThe complete removal of protective tariffs and quotas to expose domestic infant industries to foreign competition
- DA shift in government policy toward floating exchange rates to subsidize foreign buyers of domestic manufactures
Answer
Continued reliance on imported capital equipment and intermediate inputs, creating severe foreign exchange shortages
The Import Substitution Industrialization (ISI) strategy in Nigeria focused primarily on replacing imported consumer goods with locally assembled goods. However, because local heavy industry was absent, factories remained heavily reliant on foreign capital goods, raw materials, and machinery, creating persistent foreign exchange distress.
Step-by-Step Solution
Key Concept
Import Substitution Industrialization (ISI) vs. Export Promotion Strategy (EPS)