Background Paper to the Three-Plan and Programme of Action for Industrial Collective Self -Reliance for Development

Abstract

This document presents the background paper to the three-year plan and programme of action for industrial collective self-reliance for development. In recent decades, most African countries accepted the fundamental role of industrialization in raising the standards of living, alleviating poverty in the economic development process and, to this end, adopted industrialization policies aim at creating industries to produce consumer goods in-order; to replace imports and create employment. This policy was often essentially dictated inter alia by the following factors (i) the limited size of domestic markets in terms of the purchasing power of the population; (ii) limited .financial resources to undertake large capital intensive projects; (iii) scarcity of indigenous managerial and, technical' expertise to undertake and manage major industries? (iv) lack of indigenous capability and experience of international markets and market development required in the establishment of basic industries; (v) preference by private entrepreneurs both indigenous and foreign for quick returns on invested capital leading to a concentration on commerce and short-term investments with short recovery periods and limited risks.

In those economies where private enterprise predominated the strategies followed to implement the import substitute policies were of an indirect character, and included the following: (a) Encouragement of private investment, especially foreign investment; (b) Joint ventures between foreign investors and local companies, including parastatal or State corporations; (c) Provision of legal and financial incentives and physical infrastructures and supply of guidelines, pre-feasibility information and investment promotion,