This phrase has absolutely _no_ racial dimension, despite appearances. It is a Northern British (e.g. Yorkshire) term referring to a silly person. It does not derive from nigger and should not be considered racist at all.
Synonyms for nig-nog
On this page, you will find 30 slang terms related to nig-nog. Some of the top words include: fo'shizzel, tragic flaw, Bugger all, I Am your mom, Paddy, and 25 more.