Nigerian President Goodluck Jonathan has dismissed his chief of staff, three senior government sources told Reuters on Monday, extending a wave of government changes a year before elections.

Africa's second largest economy and biggest oil producer is advancing as an investment destination but political instability is a concern for investors, especially as wasteful government spending tends to spike ahead of elections.

Presidency spokesman Reuben Abati told reporters that chief of staff Mike Oghiadomhe had resigned because he wanted to pursue political opportunities in the ruling People's Democratic Party (PDP). Government sources said he was sacked.

Jonathan is facing a crisis within the PDP centered around his assumed intention to run for another term in the 2015 election. He has yet to say whether or not he will do so.

Five powerful state governors and dozens of lawmakers have defected to the recently formed coalition All Progressives Congress (APC), mostly politicians from the largely-Muslim north. Jonathan is a Christian from the southern oil region.

Analysts say Jonathan is still favorite to win a second term, if he runs, in a country where incumbents rarely lose.

Jonathan last month overhauled his military high command and appointed 12 new cabinet ministers, while the chairman of the PDP resigned.

"He is removing divisive figures and asserting his authority by aligning the people he thinks will get him in the best shape for next year," a senior government source said.

"Election campaigning has already begun."

Jonathan has been accused, most recently by his former mentor and twice president Olusegun Obasanjo, of stuffing government posts with people from his southern region.

Oghiadomhe hails from Edo state in the south and analysts will be watching to see if Jonathan appoints a northern replacement as chief of staff to appease his detractors.