The question of ethnicity has been one of the most topical subjects of study by social scientists. The controversies around this phenomenon seem to have been heated up by the high visibility of mobilized and politicized ethnic groups in most multi-ethnic states. Therefore, the extent to which ethnic nationalities are able to effectively manage the interplay of ethnic differences determines to what extent a multi-ethnic nation develops without crisis. Historically Nigeria has come a long way from multi-ethnic entity with political differences and background to the amalgamation of 1914 till the present structure of thirty-six states. Ethnicity, no doubt has contributed immensely to ethnic conflicts in Nigeria because of long standing revulsion or resentments towards ethnic groups different from one’s own or fear of domination which can as well lead ethnic groups to resort to violence as a means to protect and preserve the existing ethnic groups. Significantly ethnicity in Nigeria, is a product inequality among the various ethnic groups orchestrated by a long period of colonialism; a period which witnessed the ascendancy of three major ethnic groups to the socio-political domination of other ethnic groups and a period when the three major ethnic groups were used as a pedestal for the distribution of socio-political goods, resulting in the inability of other ethnic groups to access these socio-political goods. This situation has continued to impact negatively on the forces of national integration and cohesion in ethnically divided Nigeria. Considering the relationship between ethnicity and development; socio-political exclusion is not only ethically dangerous to development but also economically unproductive. It deprives groups and individuals of the opportunity for the necessary development that can be beneficial to the society. Thus, it is important to develop an integrative socio-political frame-work that explicitly recognizes the participatory role of every ethnic group in governance. Hence, there is a need for the adoption of inclusive governance to manage ethnicity in Nigeria. Notwithstanding, ethnic conflict still persists and an attempt will be made in this study to identify the reasons. Central to socio-political sustainability in Nigeria is a system that should recognize that differences are important to development and encompass notions of equality. Such a system should acknowledge the socio-political and economic power of every ethnic group and promote a system devoid of ethnocentric and exclusionary socio-political and economic policies.