The former Juventus midfielder had been one of the favourites to take over the role as the new coach of Nigeria, following the end of Berti Vogts' tenure.
But the 33-year-old said he could not have worked with the current situation.
Our players are professional but the NFA have a long way to go even to be considered amateur
Sunday Oliseh
"Both myself and Keshi were asking to have control over team selection, training location, friendly organisation, but it was obvious this would not have been possible.
"I told the NFA what needed to change but sometimes it is better to stay away when things are so bad.
"To apply for the job we had to complete a written test - I just had to laugh. Our players are professional but the NFA have a long way to go even to be considered amateur," Oliseh added.
Oliseh also hit out at how long it took the NFA to decide who would be the new coach.
"The coach should have been appointed two months ago so he could prepare for the World Cup qualifiers.
"Amodu has good tactical knowledge but he has to qualify for the 2010 World Cup - if Nigeria are not there it will be a disaster, the beginning of the end," Oliseh added.
Shaibu Amodu is the new coach of Nigeria's Super Eagles
"The other point to bear in mind is that Amodu has no connections in Europe - and all of our big players are based there, so it will be an uphill task."
Oliseh is not the only former player to hit out at the appointment of Amodu as Efan Ekoku also criticised the move.
"Finances are always going to play a part and when there are not even the right things provided for the players it will make it difficult to hire the right person.
"Whether Amodu is the right person to take Nigeria forward, I doubt that very much," Ekoku said.
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