The World Bank has linked funding for internally displaced persons (IDPs) to measurable performance benchmarks, making access to millions of dollars contingent on states meeting strict requirements in data management, governance, and social integration.
The funding forms part of a $300m concessional credit approved by the International Development Association for the Solutions for the Internally Displaced and Host Communities Project, which was signed between the Federal Government and the World Bank.
Unlike conventional loans, a portion of the financing will only be released after states deliver independently verified results, rather than through upfront disbursement.
Under the financing agreement approved on August 7, 2025, as much as $12m has been set aside under Performance-Based Condition Two, aimed at addressing data gaps related to displacement and vulnerability within host communities.
“The disbursement of funds is strictly tied to verified performance outcomes, with states paid only after results are achieved,” the project document stated.
In the first year of implementation, participating Tier 1 and Tier 2 states are expected to commence the registration and profiling of IDPs in selected host communities, alongside comprehensive demographic and vulnerability assessments in at least two wards. States that fulfil this requirement will receive $250,000 each.
The agreement states, “Each state which completes the assessment and surveys in the selected wards will receive $0.25m of the PBC allocation.”
By the second year, Tier 1 states will be required to meet expanded benchmarks, including conducting intention surveys and stability index assessments in locations targeted for local integration. They must also analyse the drivers of displacement, covering root causes, socioeconomic effects, migration pressures and risks associated with trafficking and smuggling.
Completion of these activities will make each Tier 1 state eligible for an additional $500,000.
The highest disbursement is scheduled for the third year, when 80 per cent of IDPs in host communities across all participating states must be fully registered and profiled. States that meet this threshold will qualify for another $500,000, bringing the total allocation under this condition to $12m.
“Eighty per cent of IDPs in host communities in all participating Tier 1 and Tier 2 states must be registered and profiled before the final tranche is released,” the report said.
By the fourth year, the project anticipates that displacement-related data gaps will have been fully addressed, with no further payments linked to this condition.
Beyond IDP data, the agreement outlines two additional performance-based conditions. Performance-Based Condition One focuses on strengthening asset management at the local government level.
Tier 1 states are required to issue asset inventory reporting guidelines as well as operations and maintenance standards that align with international benchmarks. Selected local governments must then prepare asset inventory reports and O&M plans, subject to approval by state governors and verification through audits.
Up to $9m has been allocated to this condition, with $500,000 released at each verified milestone.
Performance-Based Condition Three centres on the long-term integration of displaced persons into development planning. Under this framework, Tier 1 states are expected to support local registration facilities to enable IDPs to obtain essential documents such as birth and marriage certificates, residence identification, travel documents and driving licences. States that complete this phase will be eligible for $1m each.
Further requirements include legalising land and property ownership transfers to IDPs, establishing mechanisms to manage tensions between host communities and displaced populations, and opening at least three development programmes—covering skills acquisition, livelihoods or infrastructure—to IDPs.
A total of $12m has been allocated to this condition across several milestones.
Eligibility and enforcement
Participation is restricted to states that meet defined eligibility thresholds. Tier 1 states must host more than 150,000 IDPs, accounting for over two per cent of their population, while Tier 2 states qualify with at least 100,000 IDPs or one per cent of their population.
Eligible states are also required to sign subsidiary agreements with the Federal Government and adopt approved security management plans before funds can be accessed.
The agreement cautions that failure to meet set timelines could result in funds being withheld, reallocated or cancelled.
“All performance claims must be backed by eligible expenditures and verified by independent agents acceptable to the World Bank,” the document said.
The wider $300m credit will support infrastructure development, livelihoods assistance, institutional capacity building and project management, largely in northern Nigeria. Repayment is structured as long-term concessional financing, with principal repayments commencing on January 15, 2031, and concluding in 2050.
Each repayment instalment represents 2.5 per cent of the principal and will be made semi-annually in US dollars, with interest calculated using a reference rate plus a variable spread.
Nigeria remains the World Bank Group’s largest single borrower, with total exposure estimated at $19.39bn, representing 41.3 per cent of the nation’s external debt.
Previous reports indicate that World Bank lending to Nigeria between 2023 and 2025 is projected at $9.65bn, rising to $9.77bn when grants are included.
Recent IDA financial statements further show that Nigeria’s IDA loan stock increased from $17.1bn in September 2024 to $18.5bn in September 2025, making the country the largest IDA borrower in Africa and the third-largest globally.
While economists recognise the potential developmental gains from the funding, they warn that expanding loan exposure could place added pressure on public finances if not supported by stronger domestic revenue generation and prudent fiscal management.
