New Nigerian leader faces catalogue of crises

People's Democratic Party (PDP) Presidential Candidate and Governor of Katsina State Umaru Musa Yar Adua addresses a rally in Abuja, in this March 29, 2007 file photo. Yar'Adua takes office as president of Nigeria on Tuesday, inheriting a catalogue of crises compounded by doubts over his own legitimacy after a flawed election.

ABUJA (Reuters) - Umaru Yar'Adua took office as president of Nigeria on Tuesday, inheriting a catalogue of crises compounded by doubts over his own legitimacy after a flawed election.

The 56-year-old state governor was handed a landslide victory in last month's presidential poll, described as "not credible" by international observers because of widespread vote-rigging and violence.

Ignoring opposition calls for a re-run, he took the oath of office at a military parade ground in the capital Abuja in a ceremony featuring military bands, dancers in grass skirts, drummers and masquerades.

"As president of the Federal Republic of Nigeria I will discharge my duties to the best of my ability, faithfully in accordance with the constitution," Yar'Adua said.

The handover was billed as a democratic landmark in Africa's most populous nation because it is the first transfer from one civilian leader to another in a nation scarred by decades of army misrule. But the election wiped the gloss off the occasion.

Washington and former colonial ruler Britain sent relatively junior envoys to the event, and only a handful of African heads of state showed up.

Many Nigerians have shrugged off the flawed election and see the peaceful transition as a sign of progress.

"Just recently we were experiencing coups and counter-coups, so what we have today is a big improvement," said Musa Abubakar, a civil servant who came hundreds of miles to see the ceremony.

Yar'Adua, a former chemistry lecturer, has promised to sustain the economic reforms of President Olusegun Obasanjo, which have won international praise but failed to lift the majority in Africa's top oil producer out of poverty.

SHADOW OF OBASANJO

As he takes the reins of power, Yar'Adua must tackle surging violence in the oil-producing Niger Delta which has dented crude exports, the country's economic lifeline, and the threat of a strike over a surprise fuel price hike.

But perhaps the biggest test will be how he handles Obasanjo who picked Yar'Adua from obscurity six months ago, made him president and now seems determined to show him who is boss.

In the dying days of his administration, Obasanjo lifted fuel prices by 15 percent, doubled value-added tax and sold off two oil refineries to his business allies -- all moves that have inflamed the opposition and civil society groups.

Obasanjo also took some delicate decisions that should have been left to the new government, such as reshuffling army top brass and nominating National Assembly leaders.

"I wish Yar'Adua could have had a honeymoon before facing the hard knocks of policy decisions, but he will be fighting many fires on the domestic front," said Bolaji Akinyemi, a former foreign minister.

Obasanjo automatically assumes chairmanship of the ruling party when he steps down and has said he expects the party to determine policy while the government implements it. Yar'Adua has said the party has a role to play but he derives his powers from the constitution.

Many Nigerians hope Yar'Adua will break free from his predecessor, whom critics accuse of hypocrisy in his war on corruption and cronyism.

"Yar'Adua is honest. The problem is that Obasanjo drew him out, so he has to obey Obasanjo. He does not have freedom," said Ola, a construction worker in the capital.

(Additional reporting by Estelle Shirbon)