Nigeria needs to shift its focus from simply accumulating capital and increasing investment to improving the efficiency with which capital is deployed to drive productivity and inclusive economic growth, Asad Alam, former World Bank director and adjunct professor at Georgetown University, has said.
The former World Bank director made the call at the Bank of Industry (BOI) 2026 Annual Public Lecture on Tuesday in Abuja, themed ‘Rethinking Capital for Inclusive Economic Transformation.’
He said while capital accumulation and investment remain important to economic development, their impact on growth depends largely on how efficiently they are deployed, noting that productivity becomes increasingly important as economies develop.
According to him, global evidence shows that as economies grow, the contribution of total factor productivity (TFP) becomes more significant, while capital tends to generate diminishing returns.
He noted that human capital also has significant untapped potential, particularly in countries such as Nigeria where gaps remain when compared with high-income economies.
Alam identified three key areas, incentives, institutions and inclusion, as critical to maximising the impact of capital on economic development.
‘There is more to capital than just capital accumulation and investment. Efficiency of capital is essential to drive impact on growth. As countries grow, total factor productivity becomes more important
‘Human capital contribution remains modest but has huge potential given existing gaps with high-income countries. Greater equity can support potential growth
‘Investments in technology and climate action have the potential to spur productivity and structural transformation. The 3 I’s for Maximizing the Impact of Capital,’ Alam said
He said incentives should promote trade and market openness, innovation, competition and sustainability, while strong institutions should ensure the rule of law, effective government, efficient service delivery, private enterprise and appropriate regulation.
On inclusion, he stressed the importance of equity, job creation and equitable distribution of public goods in ensuring that economic growth translates into broader development outcomes.
He also identified technology and climate-related investments as areas with the potential to improve productivity and support structural transformation.
The lecturer observed that Nigeria’s experience has been different from the pattern seen in many developing economies, with total factor productivity making a declining or negative contribution to growth during the pre-reform period.
He said addressing the productivity challenge would therefore require more than increasing the volume of capital available to the economy, but ensuring that investments are supported by the right policies, institutions and human capital.
Speaking earlier, Olasupo Olusi, Managing Director and Chief Executive Officer of BOI, said the theme of the lecture reflected the need to examine how capital could be mobilised and deployed more effectively to achieve inclusive economic transformation.
He said Nigeria needs capital capable of supporting long-term industrial growth, reaching underserved businesses and attracting private investment into productive sectors.
According to him, BOI’s mandate is centred on promoting sustainable and inclusive industrial development, with the bank disbursing N645 billion in 2025, supporting more than 12,000 businesses and impacting 1.68 million jobs.
He said the scale of the opportunity required the country to mobilise more long-term capital, extend financing to underserved businesses and sectors, and use development finance to unlock greater private-sector investment.
The BOI chief executive added that financing must ultimately translate into measurable economic impact, stressing the importance of partnerships among government, development institutions, private-sector operators and other stakeholders in achieving the country’s development objectives.
‘Nigeria needs capital that can support long-term industrial growth, reach underserved businesses, and attract private investment into productive sectors. This requires us to think carefully about how capital is mobilized, structured and deployed, and the development outcomes it ultimately delivers.
‘These issues are central to BOI’s mandate to spearhead Nigeria’s sustainable and inclusive industrial development. In 2025, the Bank disbursed N645 billion, supported over 12,000 businesses, and impacted 1.68 million jobs scale of the opportunity ahead is significant. We need to mobilize more long-term capital, extend financing to businesses and sectors that remain underserved, use development finance to unlock greater private investment, and ensure that financing translates into measurable economic impact,’ he stated