Theory question 109
Government and BusinessCommerce 2 (essay)
(a) Distinguish between nationalization and indigenization
(b) State five advantages of nationalization and three disadvantages of indigenization
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(a) Nationalisation – government takes over ownership and control of private businesses; indigenisation – ownership and control of businesses pass from foreigners to citizens.
(b) Advantages of nationalisation (any five): government controls strategic industries; essential services at low prices; prevents private monopoly exploitation; profits go to the state; creates jobs; ensures even development; protects national security.
Disadvantages of indigenisation (any three): shortage of local capital and skills; may scare away foreign investors; fronting – foreigners use local names; few rich citizens gain control; possible fall in efficiency and technology.
Nationalisation transfers to government; indigenisation transfers to citizens.