The African champions needed a win in Windhoek to take an unassailable four-point Group F lead with one game to spare.
But the Super Eagles had to settle for a point when Godfrey Oboabona equalised seven minutes from time at Sam Nujoma Stadium.
Deon Hotto Kavendji had put the Brave Warriors ahead on 77 minutes as they threatened to avenge a 1-0 loss in Calabar last June.
Swede Roger Palmgren quit as coach Monday after unspecified death threats, leaving assistants Ricardo Mannetti and Ronnie Kanolelo 48 hours to prepare.
So the September clash of Nigeria and Malawi becomes a group decider with the Eagles needing a draw and the Flames a win to finish on top.
Nigeria now switch their attention to the FIFA Confederations Cup Brazil 2013 - they face Tahiti on 17 June in Group B followed by Uruguay and world champions Spain.
Malawi were held 2-2 by Kenya in Blantyre earlier on Wednesday - a result which opened the door for Nigeria to seal first place.
The Flames led twice at Kamuzu Stadium only for the 'Harambee Stars' to get a last-minute reprieve when Chimango Kayira scored an own goal.
Striker Robin Ngalande put the home team ahead a minute into the second half on an artificial pitch and midfielder Jamal Mohamed levelled soon after.
A goal from veteran midfielder Robert Ng'ambi 10 minutes before time offered Malawi hope of a rare home win only for substitute Kayira to blunder.
The sole Malawian victory in five mini-league qualifiers was away to Namibia three months ago with all three home games drawn.