The Corvus | August 2018 face of global economic shocks such as recessions and depressions , and serve as a catalyst to achieve economic diversification .
IS strategies are employed in various ways ranging from policies that restrict importation of certain foreign products to creating favorable conditions for domestic industrial development by way of tax incentives , cheaper funding , etc . in a bid to help emerging industries . History has however shown that successful import substitution goes beyond the various policy instruments and techniques employed by the government , as a lot of factors which differ from country to country could prevent these policies from being successful .
In Nigeria , the government has implemented several import substitution policies . This dates back to the 1970s with the introduction of the Indigenization decree , which declared many sectors of the Nigerian economy off-limits to foreign investment in order to develop local competence whilst ensuring that Nigerians were the main beneficiaries of the resources of the country . Whilst this led to development of the iron , steel , textile , and breweries industry at that time , the decree also discouraged Foreign Direct
Investment ( FDI ) into the country . The government eventually realized that the Indigenization decree was not the solution the country needed as it later led to reduction of non-oil investments . Fast forward a few years later to 2012 , the government launched the Nigeria Industrial Revolution Plan ( NIRP ) which included generous tax concessions and single-digit lending rates in order to boost local production in chosen sectors including agro allied , metals & solid minerals , oil & gas , construction and light manufacturing . The country saw the emergence of several intervention funding schemes including the Power and Airline
Source : World Bank Data
Intervention Fund ( PAIF ) which aimed to encourage developmental projects in the aviation and power sectors ; Commercial Agriculture Credit Scheme ( CACS ) with the aim of growing the agricultural sector and promoting low food inflation ; Micro , Small and Medium Enterprises Development Fund ( MSMEDF ) to engender inclusive growth ; Nigeria Incentive-Based Risk Sharing System For Agricultural Lending ( NIRSAL ) to de-risk lending to the agricultural sector ; Non-Oil Export Stimulation Facility ( NESF ) to attract new investments in value-added non-oil exports ; and the more recent , Anchor Borrowers ’ Programme to increase
9 Beyond the Rhetoric of Import Substitution
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