Business and Management Review Vol. 1(6) pp. 08 – 21, August, 2011 ISSN: 2047 - 0398 Available online at http://www.businessjournalz.org/bmr 8 IMPORT SUBSTITUTION INDUSTRIALIZATION AS LEARNING PROCESS: SUB SAHARAN AFRICAN EXPERIENCE AS DISTORTION OF THE “GOOD” BUSINESS MODEL i Kanayo Ogujiuba (Corresponding author) African Institute for Applied Economics; Enugu State; Nigeria Email: kannyog@yahoo.com Uche Nwogwugwu Department of Economics; Nnamdi Azikiwe University, Awka – Anambra State; Nigeria Email: recesor@yahoo.com Enwere Dike Department of Economics; Kogi State University, Anyigba – Kogi State; Nigeria Email: meidike@yahoo.com ABSTRACT The East Asian catch-up industrialization experience is often presented in the literature as a benchmark for Sub-Saharan African countries seeking to undergo an industrial revolution. A recurrent theme in the East Asian model is the use of the import substitution industrialization (ISI) phase as a basis for technological learning and international business. The East Asian countries used ISI to build up an industrial technological competence. Starting with the low- skill, labour intensive manufactures, these countries gradually moved on to manufacture more technologically complex products for export using competencies and skills acquired in the ISI phase. Typically, protectionist industrial policy featured strongly in the East-Asian experiences. Sub-Saharan Africa embarked on ISI as early as the post war II decades, consolidating that process in the post-colonial decades of the 1960’s and 1970’s and employing also protectionist industrial policy. However, in stark contrast to East Asia, Sub-Saharan Africa’s ISI ended up in a cul-de-sac; it failed to develop capacities for export manufactures and even failed to produce enough to serve expanding domestic demand. Sub-Saharan Africa’s ISI and the protectionism that underpinned it could then be described as a distortion of the ‘good’ East Asian benchmark business model. This paper draws on extant literature to explain key aspects of the Sub-Saharan African model as a distortion of the good East Asian model. The paper focuses on the elements of the protectionism that featured in both models, the nature of industrial policy, and stresses the role of labour intensive manufacturing as a viable ‘entry route’ into export-based industrialization and technological learning. Keywords: Trade, ISI, Industrialization, Protectionism, Entrepreneurship 1.0 INTRODUCTION Import substitution industrialization is simply the Industrial development program based on the protection of local infant industries through protective tariffs, import quotas, exchange rate controls, special preferential licensing for capital goods imports, subsidized loans to local infant industries, etc. ―A deliberate effort to replace major consumer imports by promoting the emergence and expansion of domestic industries such as textiles, shoes, household appliances,‖ usually requiring the imposition of protective tariffs and quotas to protect new or infant industries. From Michael Todaro 1994, Economic Development, p. 681. One of the most debated questions in the development literature is the role of government intervention in development using Import Substitution Industrialization (ISI) as was the case of the Asian Tigers. The process of industrial development in the Twentieth Century can be said to be one in which otherwise backward countries (East Asian Countries) have employed extant technologies to overcome the wide gaps between them and the industrial forerunners. The key to the successful industrialization of countries that are now referred to ―new world‖ had been not only a willingness to imitate but more importantly the will to learn. Learning inevitably occurs within a teacher-student relation and given the high pay-off that comes with