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NAME: TEMITOPE AJIBODE

SUBJECT: ECONOMICS HOLIDAY ASSIGNMENT

CLASS: SS2 GREEN (GIRLS)

SCHOOL: THE BELLS COMPREHENSIVE SECONDARY SCHOOL

TEACHER: MR. AMBROSE

pool betting. rice milling. Schedule II: Under this schedule. Some of the businesses under this schedule include beer brewing. The decree was divided into two schedules: Schedule I: Under this schedule. foreigners can participate but must reserve 40% equity participation for Nigerians. etc. cement. garment sewing etc. It is a policy designed to ensure greater participation of indigenes in the ownership.Indigenization Indigenization is the transfer of ownership and control of the business enterprises from foreigners to the indigenes. control and management of business enterprises. bicycle manufacturing. The major aim is to reduce foreign domination of the economy and ensure indigenous participation. candle and block manufacturing. shipping. furniture making. the Federal Government of Nigeria promulgated the Nigerian Enterprises Promotion Decree. some business enterprises that do not require much capital to set up are reserved exclusively for the indigenes. In 1927. The decree reserves the right to own and participate in some enterprises exclusively or partially for the government and the people of Nigeria. soap. They are mainly small scale enterprises such as cinemas. .

2.As a result of the shortcoming of the decree. 5. it was revised in 1977. The decree this time classified enterprises into three schedules: Schedule I: This schedule was increased by the inclusion of some business like clock and jewelry manufacturing. Ensures indigenous participation: Indigenization ensures greater participation of indigenes in the control and running of business enterprises in the country. To be able to control business enterprises in the country. To ensure that the means of production and distribution are controlled by the Nigerians and not foreigners. 3. Schedule II: Under this schedule. Schedule III: This schedule introduced the equity participation which must not be less than 40%. The decree reserved 100% equity participation for indigenes. So that the indigenes will have control over their resources. . etc. Advantages of indigenization 1. 4. To ensure that the country is self-reliant. the equity participation of indigenes was increased from 40% to 60%. Reasons for the promulgation of the Nigerian Enterprises Promotion Decree are as follows: 1. For industrial development of the country.

Development of local technology: It leads to the development of local skills and technology. 5. 3. 2. 4. Inexperience and incompetence can destroy business: Due to indigenization. Disadvantages of indigenization 1. Acceleration of industrial development: It leads to the promotion and acceleration of industrial development. Increase in standard of living: The standard of living of the people will increase through participation in business enterprises. It can lead to disharmony between countries: Indigenization can lead to disharmony among countries of the world as friendship will be discouraged. Discouragement of foreign investment: Indigenization can discourage foreign investment in a country. 4. 6. It can lead to capital flight: It can lead to capital flight as foreign investors will be forced to relocate to other countries.2. business can be transferre to people . Ensures self-reliance: Indigenization eliminates the problem of dependence on foreign goods by ensuring selfreliance. 3. Provision of employment opportunities: It creates employment opportunities for the indigenes.

social or strategic reasons. Rich people can hijack the economy: Few rich people can use their financial wealth to buy and take over all such business enterprises. To prevent exploitation: Nationalization of enterprises can take place in order to prevent monopolistic exploitation of the citizens. Enterprises are brought under state control and ownership as a result of economic. Nationalization Nationalization is a deliberate policy by which government takes over the control and ownership of private enterprises due to economic. they are not profit oriented. Reasons for nationalization 1. social and strategic reasons. Nationalized industries exist to provide services. 5. In other words. . political. political. by bringing it under its exclusive control. nationalization is the process by which the government takes over the ownership and management of an industry from private control.who are not experienced and competent enough to handle such business.

2. defense and politics. 5. Need for large capital: For an industry to perform effectively and efficiently. it may need large capital which can only be provided by the government. 4. Ensures steady supply of essential services: It ensures the provision and steady supply of essential services. For strategic reasons: Government can take over the ownership and control of an enterprise for strategic reasons like security. e. Political reason: Break in diplomatic relations between two countries can necessitate nationalization. 3. To provide uninterrupted services: Government can take over an enterprise in order to ensure constant and uninterrupted supply of its products or services. Advantages of Nationalization 1. Helps to check exploitation: Nationalization of an industry helps to check exploitation by foreign businessmen. Political differences can encourage retaliatory measures being taken against each other. To avoid foreign dominance of the economy: Government can also take over some companies in order to prevent dominance of the economy by foreigners.2. . America and Iraq at the instance of the Gulf War. 6.g.

6. 5. Elimination of waste: Nationalization helps to prevent and eliminate wasteful competition. Consumers can be exploited: By nationalizing an enterprise. Prevention of private initiatives: Private initiatives can be destroyed when the government takes over a few or all industries. 2. Encourages efficient use of resources: It encourages more efficient use of economic resources. Protection of strategic industries: It helps to protect and develop key strategic industries which cannot be left in private hands. . Disadvantages of Nationalization 1. NEPA. government may arrogate to itself monopolistic power which can be used to exploit consumers. Corruption and mismanagement: Most nationalized industries are not efficiently managed due to corruption and ineptitude.3. 4.g. Low productivity and inefficiency: Lack of competition can encourage low productivity and inefficiency. 4. e. 3. Mobilization of capital: Large capital can be mobilized to ensure large scale investment.

5.5. Removal of unproductive enterprises: They also assist to remove or disinvest from unproductive enterprises in the economy. Participation of private individuals: It also assists individuals to participate in economic activities through ownership of enterprises. To generate more revenue: It assists the government to generate more revenue. Autonomy of enterprises: It helps to provide autonomy of the enterprises. 3. Privatization Privatization is a policy designed to enable individuals and private or corporate organizations take over the ownership and control of government businesses such as public companies and corporations. . Reasons for Privatization 1. 4. 2. Efficient management: Privatization helps to develop a good and efficient management of enterprises. Resources can be misallocated: The resources of the country may be misallocated due to political interference.

Better choice by consumers: The policy assists the consumers to have a wide range of choice where there are abundant products. It promotes efficiency: Privatization helps to promote efficiency in production. . High cost of products: This policy is aimed at profit maximization hence it is usually associated with high cost of products or goods. 3. Generation of more revenue: The policy helps to boost the generation of more revenue for the government. Emergence of innovation: The existence of competition in the industry assists in the emergence of innovation. Reduction in public expenditure: Privatization helps in reducing public expenditure on enterprises that are not viable. 5. Disadvantages of Privatization 1. 4.Advantages of Privatization 1. 2. Poor standard of living: Privatization leads to poor standard of living of the people due to a shift in interest from pure service delivery to profit maximization. 2.

Reduction in employment: Many workers are usually laid off when industries are privatized. as long as they are difficult to make or acquire. Joint Ventures Joint ventures refer to those businesses in which private investors and governments are in partnership. Even intrinsically worthless items can be made into money. diamonds and emeralds. Loss of consumers’ welfare scheme. Monetization Monetization is the process of converting or establishing something into legal tender. Uneven distribution of income: Income is often unevenly distributed as few individuals are now in control of the industries. consumers’ welfare is not catered for. and art can also be monetized. selling a possession.3. but things such as gold. . 4. 5. Monetization may also refer to exchanging securities for currency. It usually refers to the coining of currency or the printing of banknotes by central banks. charging for something that used to be free or making money on goods or services that were previously unprofitable. Under privatization.

4. cement manufacturing. One of the major purposes of setting up a joint venture is to combine some of the advantages of government and private ownership and reduce the problems of complete government or complete private ownership. mineral exploration and production. Government may purchase a larger portion of the shares of the joint ventures. Government may provide the basic infrastructure e. Joint ventures are common in car assemblies.In other words. 3. Acquisition of part of the ownership of an already existing company. telephone services. electricity. Government can participate in joint venture with private firms in various ways. these are ventures which are set up by the government in collaboration with private firms. Government may provide a larger portion of the capital required to set up such a venture. etc. .g. 2. Some of the ways include: 1. It also eliminates the inefficiency associated with public corporations. etc. water.