The International Monetary Fund has said that subsidies, tax incentives, infrastructure development and protective regulations will help fast track the growth of industries in Nigeria and other emerging market economies.
In a new report titled “Industrial Policy and the Growth Strategy”, the Washington-based lender noted that when implementing industrial policy as part of their growth strategy, countries were often faced with competing objectives, such as securing sustainable economic growth, maintaining financial and fiscal stability, and establishing “national champions.”
The report said establishing national champions was often a distinct objective of a nation’s growth strategy.
This approach aims to create globally competitive companies, ensuring economic growth and security, the report notes.
The report read partly, “Although the use of industrial policy to establish national champions has been successful in some cases, it remains controversial.
“Economists worry that picking winners and losers can lead to market distortions and inefficient allocation of resources. Despite the concerns, the revival of industrial policy shows no signs of slowing down.”
According to the IMF, in a world of increasing economic nationalism and geopolitical tensions, establishing national champions is likely to remain an important policy objective for governments seeking to advance their national interests.
SOURCE: THE PUNCH
