Indigenization

Question 1

What is indigenization

Answer 1

Indigenization is the transfer of ownership and control of business enterprises from foreigners to indigenes

Question 2

Advantages of indigenization

Answer 2

1. It ensures greater participation of indigenes in the control and management of business enterprises
2. It increases the standard of living of the people
3. It lead to local retention of profits which otherwise would have been taken to other countries as capital flight
4. It encourages self reliance
5. It ensures the development of local skills and technology
6. It provides employment opportunities for citizens

Question 3

Disadvantages of indigenization

Answer 3

1. It discourages foreign investment in a country
2. It can lead to capital flight as foreign investors will be forced to relocate to other countries
3. It can bring about incompetence and inexperienced citizens working in the business enterprises which can destroy the business
4. it may lead to disharmony between countries
5. Rich people can hijack and take over the economy