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Yes, if your cousin is from the US, i.e. an American citizen, then he will need a work permit to work in Nigeria. I'm not sure why you are asking about Nigerian passports - he will not be able to get a Nigerian passport unless he is a Nigerian citizen.
In other words, as an American citizen with an American passport, he will need to get a work permit and visa stamp in his passport. He will retain his American citizenship and therefore his passport. He will not be able to apply for a Nigerian passport, which is a document relating to you citizenship.
To find out more about how he can get a work permit/visa, see Visas in Nigeria.
If this doesn't answer your question, perhaps you could be a bit more clear about what you are asking.
If he is a US citizen who is a resident in Nigeria, then it's true that he needs a work permit to work in Nigeria. If he has dual citizenship and is a citizen of both the US and Nigeria, then he wouldn't need a work permit as far as I know.
As for his US passport, if this has expired, then yes he will need to renew it at a US embassy in Nigeria in order to return to the US. However it shouldn't cost more than $150, according to the US embassy website. See this page for more info - http://nigeria.usembassy.gov/acs_abuja_passports.html.
If he needs to get additional documents - for example, perhaps he needs to get his American birth certificate re-issued to prove his citizenship to the US authorities in Nigeria - then it is possible that he needs as much as $300 for the entire process.
Hope that helps!
It depends where your friend is at the moment. Is she still in Lagos?
According to the Nigeria Department of Immigration website, it will cost N5,100 to renew the passport if your friend is a Nigerian citizen with a standard Nigerian passport.
See more about requirements here:
http://www.immigration.gov.ng/index.php?id=50
http://www.immigration.gov.ng/index.php?id=57
You can start the process by applying online here:
https://portal.immigration.gov.ng/passport/epassport