The World Bank has earmarked up to $12 million in performance-based financing for Nigerian states hosting internally displaced persons (IDPs) under a new federal initiative aimed at strengthening data, governance, and long-term integration of displaced populations.
The funding falls under Performance-Based Condition Two of the Solutions for the Internally Displaced and Host Communities Project, approved by the World Bank on August 7, 2025. The project prioritises closing critical data gaps around displacement-related vulnerabilities, but access to the funds is strictly tied to independently verified results.
The allocation forms part of a broader $300 million concessional credit approved by the International Development Association (IDA) and signed between the Federal Government and the World Bank. Disbursements are staggered over several years and released only when states meet clearly defined benchmarks.
In the first year of implementation, participating Tier 1 and Tier 2 states are required to launch registration and profiling of IDPs in selected host communities and complete comprehensive demographic and vulnerability assessments in at least two wards. States that meet this threshold will receive $0.25 million each.
By the second year, Tier 1 states face deeper requirements, including intention surveys and stability index assessments in areas targeted for local integration. They must also submit detailed analyses on the drivers of displacement, covering socioeconomic impacts, migration pressures, and risks such as trafficking and smuggling. Completion qualifies each Tier 1 state for an additional $0.5 million.
The largest payout comes in the third year, when 80 per cent of IDPs in host communities across all participating states must be registered and profiled. Each state that meets this benchmark will receive $0.5 million, bringing the total allocation under this condition to $12 million.
By the fourth year, the agreement expects displacement-related data gaps to be fully addressed, with no further payments attached to this condition.
Beyond IDP data, the financing agreement includes two additional performance-based conditions. Performance-Based Condition One focuses on asset management reforms at the local government level, with up to $9 million allocated for issuing and approving asset inventories and operations and maintenance plans aligned with international standards.
Performance-Based Condition Three targets the long-term integration of IDPs into development systems. This includes supporting access to civil documentation, legalising land and property ownership, managing host-community tensions, and opening development programmes to displaced populations. A total of $12 million is allocated under this condition.
Only eligible states can participate. Tier 1 states must host more than 150,000 IDPs representing over two per cent of their population, while Tier 2 states qualify with at least 100,000 IDPs or an IDP share above one per cent. States must also sign subsidiary agreements with the Federal Government and adopt approved security management plans.
Failure to meet milestones allows the World Bank to withhold, reallocate, or cancel funds tied to unmet conditions.
The loan is structured as long-term concessional financing, with repayments beginning on January 15, 2031, and running until July 15, 2050. Nigeria’s total exposure to the World Bank Group currently stands at $19.39 billion, accounting for over 41 per cent of the country’s external debt, highlighting the bank’s central role in financing Nigeria’s development agenda.
