The Nigerian indigenization decree process involves

The Nigerian Enterprises Promotion Decree (the indigenization decree) was first enacted in 1972 and came into effect in 1974. It was then amended in 1977. So the process is commonly taught as having two phases.

Step 1: Analyze the question It asks how many phases the indigenization policy went through in Nigeria.

Step 2: Recall the concept Indigenization means transferring ownership and control of foreign-owned businesses to Nigerian citizens. The Nigerian Enterprises Promotion Decree (NEPD) did this in stages:

• First phase (1972, effective 1974): Reserved certain businesses, such as small-scale trading, for Nigerians only. It also required Nigerian participation in medium-sized businesses (Schedule I and Schedule II).
• Second phase (1977): Widened the list of enterprises reserved for Nigerians. It also raised the compulsory Nigerian shareholding in many companies, for example to 60% in some. Companies were grouped into three schedules.

Step 3: Identify the answer The decree was carried out in two phases, 1972 and 1977.

Correct answer: E. 2 phases

Exam tip: Remember the pairing "1972 and 1977 = 2 phases". The number of schedules in the 1977 decree is three, which is easy to confuse with the number of phases. Phases refer to the two decrees; schedules refer to the categories of businesses.