Local firms can help in reducing unemployment in a country when

1. Analyze the question The question asks what conditions allow local firms to create more jobs, which reduces unemployment.

2. Explain the concept Local firms hire more workers when demand for their products rises and they expand output. Demand for locally made goods rises when consumers have fewer foreign substitutes to buy. Governments do this through import restrictions such as tariffs, quotas, or bans. This is called import substitution or protection of infant industries. Nigeria has used this approach with policies on rice, textiles, and cement.

3. Evaluate each option

• A. Land acquisition becomes centralized: Centralizing land control usually makes it harder and slower for firms to get land. That discourages expansion and does not create jobs.
• B. Imports of substitutes are reduced: Consumers turn to local products, so local demand rises. Firms increase production and hire more workers, so unemployment falls. This fits the question.
• C. Waste in the firm is eliminated: This improves efficiency and lowers costs. It does not by itself raise employment, and it can even reduce the labour needed. It is mainly an efficiency gain.
• D. Subsidies to firms are decreased: Subsidies lower production costs, so cutting them raises costs and may lead to layoffs. This works against reducing unemployment.

4. Answer The correct option is B. imports of substitutes are reduced.

5. Exam tip When you see "reduce unemployment" together with "local firms", think of more demand for local goods → more production → more jobs. Options that raise local demand or lower local costs (more subsidies, fewer imports) usually point to the answer. Options that raise costs or add restrictions on firms usually do not.