The U.N. Human Development Index ranks Nigeria as having one of the worst standards of living, below both Haiti and Bangladesh. For all its oil wealth, and after seven years of governance by one of Africa's most highly touted democrats, Nigeria has become the largest failed state on earth.

Obasanjo claims to have been born again in prison, and he is prone to wearing his religion on his sleeve—a matter of controversy in a country that is half Muslim and nearly half Christian. He has exhorted Nigerians to "return to God," and many have done so, though not as he intended. Following the death of Abacha, a Muslim, the northern twelve of Nigeria's thirty-six states, acting against the constitution, imposed sharia. Many Christians in those states rioted. When asked about the role of sharia in the country's sectarian violence, Obasanjo (apparently unwilling to risk confrontation with the Muslims and, by extension, the military), said only, "Sharia is for the Muslims as the Ten Commandments [are] for a Christian."

The religious tensions commingle with ethnic ones. Obasanjo has lifted many dictatorial strictures on daily life, but in the absence of effective security forces, this has only heightened clashes among the populace. During his rule, the most lethal period of unrest in the country's history, more than 10,000 people have died. One of the worst zones of conflict is the Niger River Delta in the south, the site of most of Nigeria's mainland petroleum reserves. In recent years, numerous attacks by militias under the rebel leader Alhaji Dokubo-Asari have forced multinationals (against whom Dokubo-Asari has promised "all-out war") to cease pumping, causing oil prices on the world market to spike. Threats also emanate from the north, one of the most radicalized areas of Muslim black Africa.

The security forces that Nigerians expected Obasanjo to bring to heel still act as a caste unto themselves, extorting and killing with impunity. Armed robbers outgun the police, who receive their salaries months late. Many officers have turned to releasing accused criminals from jail in return for bribes. Citizens seeking revenge have murdered police officers and soldiers, whose comrades have undertaken murderous reprisals. Obasanjo has adopted a malignant policy of laissez-faire, saying, "The military should not be pampered, but the military should not be bashed." Across much of the country, anarchy reigns.

Rumors are circulating that Obasanjo may seek a third term in next year's elections, although he is constitutionally prohibited from doing so. Whether or not he stays on, his country's troubles may eventually entangle the United States. One particularly ominous scenario looms: rebels may succeed in halting oil extraction in the delta, drying up the revenues on which the northern elites depend. If, in response, a northern Muslim general were to oust the president and seize power, the United States would find itself facing an Islamic population almost five times Saudi Arabia's, radicalized and in control of the abundant oil reserves that America has vowed to protect. Should that day come, it could herald a military intervention far more massive than the Iraqi campaign.