Later Career
In April 2007 Musiliu Obanikoro ran for governor of Lagos State on the PDP ticket, but lost the election to Babatunde Fashola of the Action Congress. The election was marred by violence. In one incident, Musiliu Obanikoro was said to have narrowly escaped death in an armed attack on his car in Ikeja. His nomination as PDP candidate was controversial. Hilda Williams, widow of the murdered Engineer Funsho Williams, had been declared winner of the Lagos PDP primaries, but the PDP National Executive Committee (NEC) led by Ahmadu Ali gave the ticket to Obanikoro. The disunited PDP under Bode George also lost the Lagos State Senate and all but one House of Representatives and 37 State House of Assembly seats to the AC.
In a newspaper interview in July 2007, Obanikoro called on the Federal Government to declare a state of emergency in Lagos State, claiming that infrastructures and values had completely collapsed.
President Umaru Yar'Adua appointed Musiliu Obanikoro as Nigerian High commissioner to Ghana in May 2008.
Divisions between factions in the Lagos State PDP which had surfaced before the 2007 elections continued until a series of meeting in October 2009, where the differences were resolved.
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