Former Kaduna State governor, Nasir Ahmad El-Rufai, has linked Nigeria’s economic underperformance to the misallocation of human capital, arguing that the growth crisis is not due to a lack of talent, capital, or ideas, but rather how incentives dictate where talent is applied.

In a post shared on his X account on April 1, 2026, El-Rufai characterized Nigeria as a paradox; despite having “extraordinary human capital,” the nation experiences weak growth and low productivity. He believes the core issue is a political economy problem driven by incentives rather than moral failings.

El-Rufai explained that skilled individuals are drawn to sectors offering the highest returns. When rewards are concentrated in productive areas like entrepreneurship and innovation, economies thrive. However, when rewards stem from rent-seeking—redistributing existing wealth rather than creating new wealth—economic progress suffers.

”Nigeria’s growth problem is not primarily a shortage of talent, capital, or ideas. It is a problem of where our best talent goes—and why. This is not a moral argument about individuals.

”It is a political-economy argument about incentives, ” he begins

”Across societies and across history, highly capable people choose occupations that offer the highest returns to ability, especially where small differences in skill translate into large rewards. Economists describe this as increasing returns to talent.  When those returns are highest in entrepreneurship, innovation, and production, economies grow.

He noted Nigeria’s GDP growth rate was about 4.1% in 2024, which, though respectable, is insufficient for its growing population, and GDP per capita is around $1,084, categorizing it as a lower-income economy. About 93% of the labor force works in the informal sector, resulting in small, fragile businesses. Additionally, Nigeria has a tax-to-GDP ratio around 8.2%, one of the lowest in Africa, indicating weak fiscal capacity.

El-Rufai argued that these conditions discourage legitimate business expansion and push capable individuals towards state-related activities where returns are quicker and more secure. He warned that this trend aligns with economic theory, which suggests that widespread rent-seeking opportunities attract talent away from productive sectors.

He concluded that rent-seeking harms economic growth by diverting resources from productive use, increasing business costs, and diverting skilled individuals from entrepreneurship. This dynamic not only reduces income levels but can also permanently hinder a country’s growth trajectory.