(a) What is indigenization?
(b) Explain four advantages and four disadvantages of indigenization.
Explanation
(a) Indigenisation is a policy designed to increase the participation of citizens in the ownership and management of business enterprises in the country.
(b)
(i) Advantages of indigenisation are:
(i) The indigenisation decree bestowed on citizens, the opportunity to take over businesses that otherwise would have been owned by foreigners.
(ii) It increases the pace of industrial development.
(iii) With indigenes as owners, the need to transfer foreign exchange in the form of dividends to foreign shareholders, has been reduced to some extent.
(iv) It gives indigene opportunities for self-reliance and economic emancipation.
(v) The indigenisation decree has helped the indigenes the art of managing big businesses.
(vi) It ensures that the indigene’s industrial potentials are fully tapped.
(v Indigenisation gave a boost to the development of the Nation’s Capital Market.
(viii) Indigenisation guarantees the reduction of foreign control over a Country’s economy.
(ix) It enhances the pride of the nation.
(x) Indigenisation brim about a reduction in capital flight
(b)
(ii) Disadvantages of indigenisation are as follows:
(i) The decree or succeeded in transferring the wealth of the country to a few rich elites.
(ii) The taking over of the businesses do: not reflect geographical spread as many people may not be opportune to buy the shares.
(iii) Many businesses: taken over as a result of the indigenisation exercise are mismanaged.
(iv) Many enterprises took ova by indigenes are still effective in the hand of foreigners and indigenes are only being used as “fronts” to protect tr real foreign owners.
(v) Indigenisation has reduced the amount of foreign investment coming into the country, sin.