Nigeria's anti-graft agency, set up in 2002, was supposed to crack down on corruption in Africa's most populous nation but it has failed to deliver, Human Rights Watch said on Thursday.
"There were high hopes for the Economic and Financial Crimes Commission as Nigeria's most promising effort to tackle corruption since the end of military rule," said Daniel Bekele, Africa director at Human Rights Watch.
"But its efforts have fallen short because of political interference, institutional weakness, and inefficiency in the judiciary that cannot be ignored."
Nigeria is regularly ranked by international agencies as one of the most corrupt countries in the world.
Human Rights Watch said in its report that endemic corruption has fuelled political violence, fraudulent elections, and other human rights violations, as living standards have fallen despite Nigeria's vast oil wealth.
The EFCC has arrested senior political figures, including former state governors, but the cases have often failed to end in prosecutions.
In June, the EFCC in June arrested the former speaker of parliament Dimeji Bankole, one of the country's most powerful politicians, saying it feared he planned to flee abroad to avoid facing fraud allegations.
James Ibori, one of Nigeria's richest politicians and the former governor of the oil-producing state of Delta, was arrested last year in Dubai at the request of Britain's Metropolitan Police. He has been charged in Britain.
President Goodluck Jonathan was sworn in for his first full term in May and has pledged to clean up corruption in Nigeria.