Import substitution strategies will stimulate growth, dev’t

In reference to Africa’s insatiable appetite for exotic and imported products, Professor Ali Mazrui, once lamented that in Africa we produce what we don’t consume and consume what we don’t produce.

Monday, December 30, 2013
Stephen Mugisha

In reference to Africa’s insatiable appetite for exotic and imported products, Professor Ali Mazrui, once lamented that in Africa we produce what we don’t consume and consume what we don’t produce. Indeed, by and large, for most African countries there are no national specific strategies designed to shape or reduce our greed for exotic imports. Our mindset and purchase patterns are shaped by the international context which, in turn, is designed to promote interests of a few powerful economies of the world. In his writing in 1985, M. Bienfeld argued that "there is a greater need than ever for national policies to be formulated in the context of an informed judgment about the nature of international development, because these are currently deeply contradictory and increasingly uncertain.” In reference to this statement, if we are to make any meaningful economic growth and development we need to first rethink about our purchasing patterns and governments must take a lead on this! Our infant industries will never grow as long as we still have insatiable appetite for foreign imported products, including furniture that we would easily get from our local small scale manufacturers! When do we expect the furniture maker in Gakinjiro to grow when all government tender specifications to furnish a certain ministry or department are specific to China imports? The other day, I was in a colleague’s office and our conversation focused on how we have unknowingly led to the underdevelopment of our local industries through the choices we make while buying.  When we took stock of the furniture in his office, we realised that a hundred per cent of the furniture, including the chairs, tables, shelves was all imports from China! Whereas it makes sense to import office equipment like computers, printers and other appliances in this category, it beats logic to import tables and shelves that we can easily get locally from Gakinjiro! As our discussion about this subject progressed, this colleague of mine challenged me on grounds of quality and comfort. His argument was that the furniture that is imported is of high quality and standard. I believe this argument would be bought by the majority and true to my friend’s argument the imported furniture is of high standards! However, as it’s always said that a journey of a thousand miles starts with one step. If we started using our own ‘uncomfortable furniture, in a way we would be empowering the carpenter in Gakinjiro who would eventually graduate to make the similar furniture we import today! As a matter of priority, import-substitution industrialisation should be adopted as a growth and development strategy. If this is done we shall have double benefits of growing our own industrial and manufacturing sector as well as reducing trade imbalances where our imports are always greater than our exports! If this strategy is to succeed, consumers must have an understanding of the impact of their purchases on the local economy and also find real value in the goods that are locally available; as earlier mentioned the government should take the lead on this.However, with all its benefits import-substitution is not free of drawbacks. Our local manufacturing sector must make efforts to improve on quality and standards so as to attract and stimulate local demand. Also, local industries should make effort to take advantage of economies of scale in manufacturing their products so as to reduce the costs of production. Without strategising around economies of scale, a manufacturer who mass produces chairs in China and exports them to Africa, or all over the world for that matter, may be able to sell them at a lower price than a local carpenter in Gakinjiro and, as result, the local carpenter may not be able to compete on price. This is one of the reasons why locally produced goods are more expensive than the imported ones, not forgetting the net-effect of the taxman as well. In the meantime, our economists should carry out more research on import-substitution strategies.The writer is an educationist, author and publisher.