Explain each of the following: (a) Indigenisation policy (b) Localization of industry (c) Economies of scale (d) National budget.

Answer Details

a. Indigenisation policy. This is a government policy that transfers the ownership and control of business enterprises from foreigners to citizens (nationals) of the country, so that indigenes participate more fully in and dominate the economy.

b. Localisation of industry. This is the concentration of a particular industry in a specific geographical area, arising from advantages such as nearness to raw materials, availability of labour, market, power or good transport in that area.

c. Economies of scale. These are the cost advantages, that is, the fall in average (unit) cost of production, that a firm enjoys as it expands its scale of output. They may be internal (arising within the firm, such as bulk buying and better machines) or external (arising from the growth of the whole industry).

d. National budget. This is a financial statement showing the government's estimated revenue and proposed expenditure for a given period, usually one year. It may be balanced (revenue equals expenditure), a surplus budget (revenue exceeds expenditure) or a deficit budget (expenditure exceeds revenue).