The performance of import substitution as a strategy of industrialization in Tanzania

Studies which have been carried out on industrial development in underdeveloped countries have shown that usually the aims and objectives of industrialization through import substitution do not conform to the outcome of the strategy. Normally import substitution is designed to solve balance of payments problems including other problems of economic underdevelopment yet it has been claimed that the strategy ends up in bringing more balance of payments problems and economic stagnation. This paper therefore tries to investigate on the problems of import substitution industrialization in Tanzania, based on quantitative data from some selected consumer and intermediate goods industries. The study is guided under the hypothesis that import substitution industrialization has not successfully solved balance of payments problems. In the introductory part we try to outline the economic background to import substitution in Tanzania and the research techniques used. The first chapter deals with the theory and logic of industrialization through import substitution. Import substitution here is discussed from the point of view of both underdeveloped and developed capitalist countries. In chapter two we empirically determine the position of the selected industrial products in the Tanzanian market and measure their levels of Import substitution in the period 1966 to 1977. Chapter three discussed the contribution of the selected industries to the balance of payments in Tanzania. In the fourth Chapter we shall conclude the discussion by giving a summary of our observations.