That’s an achievement but, if he wins, Obasanjo will have to tackle the deep-rooted problems that he failed to address during his first four years as president. Analysts say he must crack down on corruption, reorganize Nigeria’s top-heavy federal system and mend the Muslim-Christian divide that has caused the deaths of thousands in recent years. (Nigeria has more Christians and Muslims, almost equally divided, than any other country in Africa.)

In addition, Obasanjo has to sort out the volatile politics of the oil-rich Niger Delta and placate locals who demand a greater share of the wealth that comes from under their feet. Oil accounts for 70 percent of the country’s economic output. In March, fierce battles in the Delta region between hired gangs of local bosses quickly turned into a war between ethnic groups. Oil companies shut down their operations, costing Nigeria 40 percent of its production. “There was no real reform in the first term,” says one Western diplomat in Lagos. “Everyone hopes that now he will be more radical.”

Nigeria is not just another African country in trouble. It is the giant of West Africa, the world’s largest black nation, with some 120 million inhabitants. It is also the world’s sixth largest oil producer, providing 10 percent of U.S. oil imports. Production is expected to double by the end of the decade. But Nigerians are poorer today than they were at independence in 1960. Per capita income has fallen from about $1,000 a year in 1980 to less than $300 today. Economic growth has stayed at about 3 percent annually–barely enough to keep up with the population-growth rate. Outside of the oil industry, bad governance, weak laws and Nigeria’s terrible reputation for corruption scare off foreign investment. Not for nothing is Obasanjo’s government nicknamed the Money Republic.

Some critics worry that Obasanjo is trying to take the country back to the 1970s with a centralized, state-controlled economy. Indeed, four of his answers in an interview with NEWSWEEK began: “When I was growing up…” He’s done little to reduce government spending or to stop the rampant fraud that makes doing business in Nigeria so expensive. The government collects about $60 million a day in oil earnings and royalties, but much of that money is either squandered or stolen. “Politics is a battle for the division of spoils at the center,” says one Western diplomat in Abuja, “and democracy has simply lengthened the food chain.” A recent official national audit revealed that corruption has not declined under civilian rule. Rather than jail the corrupt, Obasanjo prefers to cut deals with them, seeking the return of stolen state funds. “My aim in fighting corruption,” he says, “is not to put big men in jail but to ensure that big men do not become corrupt.”

Nigeria seems so deeply divided along ethnic lines, and the gulf between rich and poor is so vast, that the country’s very survival seems miraculous at times. Many Christians and Muslims have lived peacefully together for generations, but after the last election some northern Muslim politicians introduced full, and often harsh, Islamic Sharia. Christians in northern Nigeria were made to feel strangers in their own country. Fighting broke out, thousands were killed and tens of thousands were driven from their homes. Southerners retaliated against Muslims living in their region. In addition to this looming catastrophe, about a dozen local wars have flared up over the last four years among the country’s myriad ethnic groups. Obasanjo has used the Army to restore order; many of the estimated 10,000 people killed in these conflicts have been shot by Nigerian soldiers.

Archbishop John Onaiyekan, the Roman Catholic Archbishop of Abuja, says the country’s leaders need to pay more attention to the common good. “What we have to change is the idea that you give your vote to someone, who then gives you something and promises to look after you. We have to do what’s best for the country.”

Obasanjo claims that when he first became president he didn’t realize how bad things had gotten in Nigeria–but that now he’s ready for real reform. “It took me a little bit of time to know the depth of the decay,” he told NEWSWEEK. “Now I won’t need to dig to find the problems.” He’s vowed to add more progressive-minded technocrats to his administration. But pressed on whether Nigerians can expect a dramatic shift of gear, he says: “I would not call it dramatic, because that would be sensationalizing it. I would say we’ll be going faster than we were.” He’d better hurry.