The period since the early 1980s when the Nigerian economic crisis began in earnest has coincided with an increase in the incidence of ethnic conflicts in the country. Even the rural areas, previously regarded as spheres of ethnic harmony have not been able to escape the spread of violent inter-communal and inter-ethnic clashes.This report represent an attempt to understand the sources of ethnic tension in contemporary Nigeria. In doing so, the relationship between economic decline, structural adjustment and ethnic clashes is explored. The focus is on the problem of rural ethnicity, a much neglected dimension of ethnicity in Nigeria.