Theory question 109
Government and BusinessCommerce 2 (essay)
(a) Differentiate between Nationalization and Indigenization.
(b) State six reasons why a country would indigenize some industries.
Show the model answer
Model answer
(a) Nationalisation is government taking over ownership and control of privately owned businesses; indigenisation is transferring ownership and control of businesses from foreigners to citizens (private or public).
(b) Any six: to give citizens control of the economy; to reduce foreign domination; to stop profits being sent abroad (capital flight); to create jobs and train local managers; to encourage local entrepreneurs; to promote economic independence; to raise citizens' income; to develop local technology.
Explanation
The key difference: nationalisation – to government; indigenisation – to citizens.