Funds tied to data accuracy, asset management and long-term integration of displaced persons
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 intervention aimed at improving data quality and long-term solutions for displacement.
The funding forms part of the Solutions for the Internally Displaced and Host Communities Project, approved by the World Bank on August 7, 2025, and is linked to strict performance benchmarks that states must meet before accessing the funds.
Under what the Bank describes as Performance-Based Condition Two, participating states will only receive disbursements after independently verified results are achieved. The focus of this component is closing data gaps around displacement-related vulnerabilities and improving how IDPs are tracked and supported within host communities.
The $12m allocation is part of a broader $300 million concessional credit provided by the International Development Association (IDA) and signed between the Federal Government of Nigeria and the World Bank. Repayments are spread evenly over 20 years, denominated in US dollars, with interest based on a reference rate plus a variable spread, subject to agreed limits.
Funding released in stages
States that successfully register and profile displaced persons living in host communities will receive funding over three years, with requirements becoming more demanding at each stage.
In the first year of implementation, participating Tier 1 and Tier 2 states must begin IDP registration and profiling in selected host communities and complete detailed demographic and vulnerability assessments in at least two wards. States that meet this threshold will receive $250,000 each.
By the second year, Tier 1 states must go further by conducting intention surveys and stability index assessments in areas targeted for local integration. They are also required to analyse the root causes of displacement, including socioeconomic impacts, outward migration pressures, and risks linked to trafficking and smuggling. Completion of these tasks qualifies each Tier 1 state for an additional $500,000.
The third year carries the largest payout. States must ensure that at least 80 per cent of IDPs living in host communities are fully registered and profiled. Each state that meets this benchmark will receive another $500,000, bringing the total available under this condition to $12 million.
By the fourth year, the World Bank expects all major data gaps related to displacement vulnerabilities to have been addressed, although no further payments are attached at that stage.
Additional performance conditions
Beyond IDP data, the financing agreement includes two other performance-based conditions tied to separate funding tranches.
Performance-Based Condition One focuses on strengthening asset management at the local government level. Tier 1 states are required to issue asset inventory and operations-and-maintenance guidelines aligned with international standards, secure approval from state oversight bodies, and undergo project audits. Selected local governments must then submit asset inventories and maintenance plans for final approval by state governors. Up to $9 million is allocated to this condition, with $500,000 released at each verified milestone.
Performance-Based Condition Three targets the long-term integration of IDPs into development planning. Under this component, Tier 1 states must support local registration centres to help displaced persons obtain essential documents, including birth, marriage and death certificates, education records, residence identification, travel documents and driving licences. States that meet this requirement are eligible for $1 million each.
Further benchmarks include legalising land and property ownership transfers to IDPs through transparent processes, setting up mechanisms to manage tensions between displaced persons and host communities, and opening at least three development programmes such as skills training, livelihood support or infrastructure projects to IDPs. A total of $12 million is allocated to this condition across multiple stages.
Eligibility and safeguards
Only states that meet strict eligibility criteria can participate. Tier 1 states must host more than 150,000 IDPs, representing at least 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.
Participating states must also sign subsidiary agreements with the Federal Government and adopt approved security management plans. All performance claims must be supported by eligible expenditures and verified by independent agents acceptable to the World Bank.
The agreement allows the Bank to withhold, reallocate, or cancel funds if states fail to meet required milestones within specified timelines.
Repayment terms and debt exposure
The loan is structured as long-term concessional financing, with principal repayments beginning on January 15, 2031, and continuing semi-annually until July 15, 2050.
The World Bank Group remains Nigeria’s largest external creditor, accounting for $19.39 billion, or 41.3 per cent, of the country’s total external debt made up of $18.04 billion from the IDA and $1.35 billion from the IBRD.
The performance-based structure of the project underscores the Bank’s emphasis on accountability, measurable outcomes and sustainable solutions to Nigeria’s displacement crisis.
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