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An assessment of import substitution industrialization’s economic implications in Nigeria: Evidence from Kaduna State

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Background of the Study :

Import substitution industrialization (ISI) is a development strategy that encourages domestic production to replace imported goods. In Kaduna State, from 2000 to 2020, government policies promoting ISI have aimed to stimulate local industries, reduce foreign dependency, and boost economic self-reliance (Uche, 2023). By providing incentives for local manufacturing, such as tax breaks and subsidies, ISI is designed to foster industrial growth and generate employment. Empirical studies have shown that successful ISI policies can enhance domestic production capabilities, although challenges like inefficiencies and protectionist measures may also lead to reduced competitiveness in the global market (Adeniyi, 2024). This study assesses the economic implications of ISI policies in Kaduna State by examining industrial output, employment trends, and the trade balance. Interviews with policymakers and industry representatives provide further insight into the effectiveness of these policies. The research seeks to determine whether ISI has led to sustainable industrial growth and reduced import reliance, while also identifying areas for policy improvement (Chinwe, 2025).

Statement of the Problem

Despite efforts to promote domestic production through ISI, Kaduna State continues to experience challenges in achieving significant industrial growth. Issues such as inefficiencies, limited technology transfer, and market distortions have hampered the success of import substitution strategies (Uche, 2023). The gap between policy goals and actual industrial performance raises questions about the long-term viability of ISI in the region. This study aims to investigate the determinants that limit the effectiveness of ISI and assess its overall economic implications, thereby providing a basis for refining industrial policies to better support domestic production and reduce import dependency.

Objectives of the Study:

1. To evaluate the impact of ISI policies on industrial output.

2. To identify factors limiting the success of import substitution.

3. To recommend policy improvements for enhancing domestic production.

Research Questions:

1. How have ISI policies affected industrial growth in Kaduna State?

2. What are the key barriers to effective import substitution?

3. What measures can improve the success of ISI?

Research Hypotheses:

1. ISI policies positively influence domestic industrial production.

2. Inefficiencies hinder the effectiveness of import substitution.

3. Policy reforms can enhance the performance of local industries.

Significance of the Study (100 words):

This study is significant as it evaluates the economic implications of ISI policies in Kaduna State, offering insights into their impact on domestic industrial growth and import dependency. Its findings will assist policymakers in refining strategies to promote sustainable industrial development and enhance economic self-reliance (Uche, 2023).

Scope and Limitations of the Study:

The study is limited to the evaluation of ISI policies in Kaduna State from 2000 to 2020. It focuses on manufacturing and does not extend to service sectors or other regions.

Definitions of Terms:

1. Import Substitution Industrialization (ISI): A strategy aimed at reducing reliance on imports by promoting local production.

2. Domestic Production: The production of goods within the country.

3. Trade Balance: The difference between the value of exports and imports.

 





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