(a) Distinguish between… | Commerce

Question 1 Report

(a) Distinguish between Nationalization and Indigenisation

(b) State any five advantages of nationalization and two objectives of indigenisation.

Answer

Answer Details

(a) Distinction between nationalization and indigenisation

Nationalization	Indigenisation
Government takes over the ownership and control of privately owned businesses.	Ownership and control of businesses are transferred from foreigners to citizens (indigenes).
The takeover is by the state, so the enterprise becomes public property.	The transfer is to private citizens, so the enterprise remains privately owned but by nationals.
Aims to bring key industries under public control.	Aims to increase local participation in the economy.

(b) Five advantages of nationalization

It brings essential and strategic industries under public control for the benefit of all.
It prevents exploitation of consumers by private monopolists.
It enables government to undertake capital-intensive projects that private investors cannot afford.
It ensures the provision of essential social services such as water and electricity even where they are not very profitable.
It helps to prevent foreign domination of the economy and keeps profits within the country.

Two objectives of indigenisation

To increase the participation and ownership of businesses by citizens of the country.
To reduce foreign control and domination of the nation's economy and retain profits at home.

(a) Distinguish between Nationalization and Indigenisation (b) State any five advantages of nationalization and two objectives of indigenisation.