Clinton says bad governance fuels Nigeria poverty gap

By Sue Pleming and Felix Onuah

ABUJA (Reuters) - U.S. Secretary of State Hillary Clinton Wednesday blamed failed government for Nigeria's huge poverty gap and urged Africa's most populous nation to toughen up on corruption and fix a "flawed" electoral system.

Clinton said Nigeria -- the continent's biggest energy producer and its second biggest economy -- should rank among the world's most important developing nations but its reputation for graft undermined its international standing.

"The most immediate source of the disconnect between Nigeria's wealth and its poverty is a failure of governance at federal, state and local level," she said in a speech at a town hall meeting of several hundred civil society leaders.

"Nigeria should be in a position to be part of the G20 but -- a big but -- the corruption reputation ... it is a problem," she said in the capital Abuja, after meeting earlier with President Umaru Yar'Adua and his foreign minister.

Mismanagement and graft over decades have imperiled Nigeria's development, deterred investment, undermined democracy and deepened conflicts such as the insurgency in the southern Niger Delta and bouts of religious violence in the north.

Clinton said the World Bank had concluded in a recent report that Nigeria had lost more than $300 billion over the past three decades as a result of corruption and other problems.

Citing United Nations figures, she said the poverty rate had risen to 76 percent from 46 percent over the past 13 years alone despite the country pumping 2 million barrels per day of oil.

Clinton said Washington was keen to support efforts to increase transparency and bolster democracy before national polls in 2011 and said the two countries planned a commission to tackle issues from Niger Delta violence to electoral reform.

Nigerian Foreign Minister Ojo Maduekwe described the talks between Clinton and Yar'Adua as "candid, encouraging and mutually inspiring" and said the Nigerian president had acknowledged there were major issues to face.

"Electoral reforms and commitment to the rule of law, the fight against corruption -- the president acknowledged that we have serious challenges there," Maduekwe told reporters.

TURBULENT OIL DELTA

Corruption has been a theme of Clinton's trip to seven African countries, echoing U.S. President Barack Obama when he visited Ghana last month. U.S. officials had said Clinton would take a tougher line in private than in public with Washington's fifth biggest oil supplier.

In the decade since the end of military rule, elections have been far from exemplary in a country that considers itself the biggest democracy in the black world.

The April 2007 polls that brought Yar'Adua to power were so marred by ballot-stuffing and voter intimidation that observers said they were not credible. A reform bill before parliament is meant to avoid a repeat performance in 2011 polls.

Besides good governance, Clinton said Nigeria's future also depended on "respect and understanding among religions, particularly among Islam and Christianity."