LAGOS, Nigeria—Police on Friday arrested the head of a federal agency charged with developing Nigeria’s impoverished southern oil region after allegations the man spent millions of dollars on a witch doctor in hopes vanquishing a rival.

President Umaru Yar’Adua announced Friday that the head of the Niger Delta Development Corporation, Sam Edem, had been suspended from his job after local media reports of Edem’s large expenditure on black magic. Police later said he had been arrested.

The police said they were investigating the source of the roughly $4 million Edem reportedly spent on hiring a sorcerer to hex and kill another development official.

The federal government said it was investigating how Edem, a civil servant in a country of low wages, had amassed the fortune he used to engage the sorcerer.

The government said in a statement that Edem wasn’t available for comment. It added that he hasn’t denied any of the charges.

While Nigeria’s 140 million people are split between Christianity and Islam, black magic is still prevalent in some rural areas.

Police said in a statement that Edem contracted the witch doctor to kill a subordinate that Edem believed harbored him ill will. Edem also wanted the sorcerer to help compel a state governor to award Edem “juicy contracts,” according to the police statement.

The police said Edem was “incensed” when none of the work contracted to the witch doctor had been achieved and had demanded a total refund. The witch doctor refused.

Nigeria is regularly ranked among the world’s most-corrupt nations. Investigators say some $400 billion has been stolen or squandered since the country’s 1960 independence from Britain.