How faulty political economy keeps Nigeria’s progress on hold
A faulty political economy is at the centre of Nigeria’s underdevelopment. Until this is corrected, the country will continue in its boom-bust cycle that has characterised its developmental trajectory. Resource abundance will not change it. Rhetoric cannot perform any magic on it. Debates over the weakness of Nigeria’s political economy have persisted for decades, yet there […]
A faulty political economy is at the centre of Nigeria’s underdevelopment. Until this is corrected, the country will continue in its boom-bust cycle that has characterised its developmental trajectory. Resource abundance will not change it. Rhetoric cannot perform any magic on it.
Debates over the weakness of Nigeria’s political economy have persisted for decades, yet there has been insufficient political will to change it in favour of the people. This explains the country’s lackluster growth and the continued rise in poverty, both in the cities and villages. It also explains why the country continues to suffer from a lack of thinking despite its abundance of plans.
Political economy is at the same time about inclusion and exclusion in a nation’s economy and how political power creates that trajectory. It determines who is included in the production process and those who are left out in the distribution or consumption process, as the power structure influences economic decisions. Being the meeting point of politics and economies, it relates to how vested interests shape economic outcomes and how economic policies affect political behavior. Political economy is not just about “what policies make sense,” but about who wins, who loses, and why policies are implemented or not.
Take a roll call of our official activities, and the extent of Nigeria’s planning efforts will shock you. There has been no administration without grandiose plans. Nor has there been any minister who lacked the dossiers of plans and planning for success in his or her ministry. From development plans to economic reform commissions, the stories and messages have been virtually the same. Yet the story has hardly changed.
This is 2026. Nigeria is, in many ways, a land of paradoxes. It is one of the greatest resource-endowed countries, yet we import basic food staples and manufactured goods. The economy remains dominated by informality, with the informal sector accounting for 76.7 per cent of the country’s workforce, according to a report by Jobberman and the Mastercard Foundation in October 2024. A year later, in October 2025, the Nigeria Economic Summit Group raised the alarm: as much as 93 per cent of the nation’s labour force is engaged in the informal sector. With this army of the under-employed taking refuge under the uncomfortable shelter of the informal sector, NESG said the country’s economy is operating on a ‘survivalist’ mode.
At a recent high-profile event on the prospects of the Nigerian economy in 2026, a former government official almost wept in the middle of a discussion. According to her, the same themes that government officials treated while she was in office were still being regurgitated in January 2026 as the panaceas for our challenges. The rhetoric has been the same: growth, industrialisation, infrastructure, and human capital. Time has passed, and plans have piled up, yet the economy is begging for guidance.
In a functional political-economic system, deliberations at these conferences, workshops, and seminars should have led to inclusive growth, infrastructure that supports industrialisation, and sustainable growth. These are still far from being achieved, despite the thousands of keynote addresses delivered by keynote speakers on the best ways to attain development.
Our faulty political economy is unable to deliver physical or social infrastructure to support and engender growth and development. It is, however, able to structure and deliver “stomach infrastructure,” in the words of one of Nigeria’s sagacious politicians, a man of high creative ingenuity. Since Ayo Fayose invented this concept, no Nigerian politician or non-politician has doubted its appropriateness to the undue advantage that the political corridor confers on those who walk thereon.
Stomach infrastructure is the hallmark of a defective political economy where the office holder and his associates first arrogate to themselves state resources, first to themselves, and consider the masses later. In this system, economic opportunities are often concentrated among insiders. This leads to poor implementation of policies that involve measures such as subsidies, industrial incentives, and contracts. Often, such measures are captured by politically connected elites, often bypassing the real productive actors. Consequently, the economy is the loser because resources are not allocated optimally.
Nigerians experienced this in the days of oil subsidy and other forms of price or interest incentives that ended up being grabbed, not by those who needed them, but by rent collectors. Rent seeking is one of the legacies that Nigeria’s dependence on oil has bequeathed the country. Ours is a system that rewards politicians and the politically connected, not for building an efficient economy, but for controlling access to rents.
All these are possible because the state keeps the institutions weak, so they cannot perform well. There is a policy inconsistency. Reforms are reversed as administrations change. So, without a change in the nexus between politics and economics in Nigeria, development planning, reforms, and other economic slogans will continue to produce limited impacts.