Theory question 105
Industrialisation(a) What are infant industries?
(b) State any four reasons for protecting infant industries.
(c) Outline any three ways by which industries can be financed in West Africa.
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(a) Infant industries are newly established industries that are still small, with high costs, and cannot yet compete with older, larger foreign firms.
(b) Any four: to allow them to grow and reach economies of scale; to create employment; to save foreign exchange; to diversify the economy; to prevent dumping; to develop local skills and technology; for self-reliance and national security.
(c) Any three: personal savings/owners' capital; sale of shares and debentures (stock exchange); bank loans and overdrafts; development bank loans; government grants and subsidies; foreign investment/joint ventures; ploughed-back profits; trade credit; leasing.
Infant industries need time behind protection to become competitive.