(Adds government statement)

By Felix Onuah

ABUJA, Aug 31 (Reuters) - Nigerian President Umaru Yar'Adua has received medical treatment in Saudi Arabia, a source in the presidency said on Sunday, but the government said he was in good health and fit to lead Africa's most populous nation.

Yar'Adua, known to have a chronic kidney problem, travelled to Saudi Arabia two weeks ago for the Islamic obligation of Umrah, the lesser Hajj. He has cancelled a state visit to Brazil which he had planned to make after the Muslim pilgrimage.

Some Nigerian newspapers reported on Sunday that the president had undergone a renal transplant in Jeddah.

"He is receiving some medical attention in Saudi Arabia," a source in the presidency told Reuters, asking not to be named and giving no further details.

Nigerian officials have kept tight-lipped over Yar'Adua's condition, insisting that the president is in good health and in Saudi Arabia for Umrah, not for treatment.

The government said in a statement he was expected back in Nigeria soon after his pilgrimage.

"The federal government wishes to restate that Mr President is very well and healthy. He is in good health to steer the affairs of the state," the statement said.

Yar'Adua's health has been a source of constant speculation in the Nigerian media and opposition politicians, among others, have voiced concern about whether he is fit enough to govern.

His victory in April 2007 polls has been challenged at the Supreme Court by his two main rivals. Should he become unable to govern there could be a constitutional crisis in Africa's leading oil producer.

His health was a source of concern even before he became president over a year ago. He had to be rushed to a hospital in Germany while he was campaigning in March last year, just weeks ahead of the presidential election.

He has since returned to Germany on several occasions for medical check-ups, the latest in April. (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ ) (Reporting by Felix Onuah and Tume Ahemba; editing by Nick Tattersall and Mary Gabriel)

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