WAEC Commerce 2013 Theory — Question 9

Model answer

(a)(i) Nationalisation: This can be defined as the act of converting a privately owned firm to government owned corporations. This is done to improve the welfare of the citizens. (ii) Indigenisation: This is the act of making the citizens of an economy to participate actively in the control of the economy so as to save the economy from being controlled by foreign firms. (iii) Commercialisation: This can be defined as the act of making a public corporation profit oriented. When a public enterprise which was not profit oriented is restructured to become a profit-oriented firm, then, it has been commercialised. (iv) Privatisation: This is the process of converting a public corporation which is not profit oriented and which is owned by government to private individual with profit motive. (b) Reasons government participate in business: Government participates in business so as to provide essential services to citizens at a cheap price. It also participates in business to avoid the exploitation of consumers. Also, to prevent the monopoly of private sector. Also, some investments are so huge and have little profit but if it is essential for the sustainability of the state, the government invests in it.