Nigeria’s Rent-Seeking Economy Stifling Wealth Creation — Utomi

Professor of Political Economy and Management, Pat Utomi, has decried Nigeria’s economic structure, saying it rewards rent-seeking, political connections and access to government contracts rather than productivity and genuine wealth creation.

Utomi, who spoke in Benin City, Edo State, Tuesday during an interview with journalists, said the system had created what he described as a “feeding bottle economy,” where a section of the elite depends on public resources for personal enrichment instead of building enterprises that create jobs and expand economic opportunities.

According to him, Nigeria’s economic challenge is not a lack of resources, but a system that enables individuals to accumulate wealth through connections without creating corresponding value for society.

He said, “Nigeria should be creating wealth but because of the economic rent in the system, you have connection, you get contracts, you do all these things and you get money without creating any real value.”

The professor explained that genuine wealth creation should translate into employment, improved living standards and broader economic opportunities, unlike a system where public funds are diverted into private hands.

Utomi said, “If you are creating wealth, the thing you are producing will result in jobs and jobs will make life better for many more people. But you see somebody who has so much money but just a few hangers-on are the jobs that he creates because he is not creating wealth, he is just taking public money and putting it in his pocket. That’s why it’s a feeding bottle economy.”

He lamented that Nigeria, despite its vast natural and human resources, has remained economically underdeveloped, unlike countries such as Qatar and Saudi Arabia that have leveraged their resources to build stronger economies.

Utomi, who referenced a recent lecture by former Minister of Agriculture and President of the African Development Bank, AfDB, Dr Akinwunmi Adesina, blamed the situation partly on the failure of the Nigerian elite to invest in building institutions, businesses and human capital that can create sustainable prosperity.

He said, “Nigerian elites are not willing to work hard and build their people up because they are so selfish. They just see what they can take from the system, not something they create.”

The political economist also criticised the failure of the Nigerian system to encourage competition, innovation and what economists describe as “creative destruction,” where new ideas and businesses displace less efficient ones.

According to him, powerful interests often frustrate emerging entrepreneurs and ideas in order to protect established economic interests.

“The nature of capitalism is not wickedness, it is competition. In Nigeria, those who have power try to block the way for those who are coming and that will keep everybody down,” he said.

Utomi argued that Nigeria needs institutions capable of allowing people with innovative ideas to compete and succeed, regardless of their political connections or financial background.

He said such an environment would enable new businesses and ideas to challenge dominant economic interests and ultimately stimulate growth.

“If the system has institutional arrangements that enable people who have great ideas but don’t have resources to break through, then they can torpedo the current dominant capitalist class. That’s creative destruction,” he said.

Utomi called for visionary leadership, stronger institutions and policies that promote merit, enterprise and innovation, rather than political patronage and rent-seeking.

He also urged journalists to play a greater role in transforming public discourse by enlightening citizens and shifting political conversations away from ethnic and emotional sentiments towards ideas, policies and development.

“Enlightenment from journalists like you is a critical part of it. When people are more enlightened, they will see that the quarrel is about ideas, not us against them based on emotion,” he said.