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States hosting IDPs eye $12m World Bank loan

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States hosting internally displaced persons are set to earn up to $12m from a World Bank–backed loan if they meet a series of strict data, governance, and integration benchmarks under a new federal project targeting displacement and host communities.

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, signed between the Federal Government and the World Bank.

The Solutions for the Internally Displaced and Host Communities Project was approved by the World Bank on August 7, 2025. The agreement ties disbursement of part of the loan to performance-based conditions rather than upfront spending, with states paid only after independently verified results are achieved.

Under Performance-Based Condition Two, which focuses on closing data gaps on displacement-related vulnerabilities, $12m has been earmarked for states that successfully register and profile displaced persons living within host communities. The disbursement is spread over three years, with escalating requirements.

In the first year after the project becomes effective, participating Tier 1 and Tier 2 states must 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 initial threshold are entitled to $0.25m ($250,000) each.

The report read, “Participating Tier 1 and Tier 2 States launched registration/profiling of IDPs in selected host communities, and completed: comprehensive demographic and vulnerability assessment; in at least 2wards. Each State which completes the assessment and surveys in the selected wards will receive $0.25m of the PBC allocation.”

By the second year, the requirements deepen for Tier 1 states, which must conduct intention surveys and stability index assessments in areas targeted for local integration. They must also produce detailed analyses of the drivers of displacement, including underlying causes, socioeconomic impacts on displaced persons, outward migration pressures, and risks linked to trafficking and smuggling. Completion of these tasks qualifies each Tier 1 state for an additional $0.5m ($500,000).

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The most substantial payout is tied to the third year, when 80 per cent of IDPs in host communities across all participating Tier 1 and Tier 2 states must be registered and profiled. Each state that meets this benchmark will receive $0.5m ($500,000), bringing the total allocation under this performance condition to $12m.

“80 per cent of IDPs in host communities in all Participating Tier 1 and Tier 2 States are registered and profiled. Each Participating State that completes all the above will receive $0.5m of the PBC allocation,” the report read.

By the fourth year, the agreement expects data gaps on displacement-related vulnerabilities to be comprehensively addressed, with no further payments attached. Beyond IDP data, the financing agreement outlines two additional performance-based conditions that states must meet to access other tranches of the loan.

Performance-Based Condition One focuses on improving asset management by participating local governments. Tier 1 states are required to issue asset inventory reporting guidelines and operations and maintenance standards aligned with international benchmarks, approved by state oversight agencies, and verified through project audits.

Selected local governments must then issue asset inventory reports and O&M plans, followed by full approval of all local government–level asset inventories by governors. Up to $9m is allocated to this condition, with states receiving $0.5m ($500,000) at each verified stage.

Performance-Based Condition Three targets the long-term integration of IDPs into development processes. Participating Tier 1 states must provide financial and technical support to local registration facilities to help IDPs access basic documentation such as birth, marriage, death and educational certificates, residence identification, travel documents and driving licences. States that complete this stage are eligible for $1m each.

Further requirements include legalising ownership transfer of land and property to IDPs through transparent processes, establishing monitoring mechanisms to manage tensions between displaced persons and host communities, and opening at least three development programmes covering skills development, livelihoods or infrastructure to displaced populations. A total of $12m is allocated under this condition, spread across successive milestones.

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Only states that meet strict eligibility criteria can participate. Tier 1 states must have an IDP population exceeding 150,000 and accounting for more than two per cent of the state 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 before accessing funds. The agreement stipulates that all performance claims must be backed by eligible expenditures and verified by independent agents acceptable to the World Bank.

Failure to meet milestones within specified timelines allows the Bank to withhold, reallocate or cancel funds tied to the affected performance condition.

The broader $300m credit finances infrastructure, livelihoods support, institutional strengthening, and project management across northern Nigeria, but the performance-based components reflect the World Bank’s emphasis on accountability and measurable outcomes in displacement policy.

On repayment, the loan is structured as long-term concessional financing. Principal repayments will commence on January 15, 2031, and continue semi-annually on January 15 and July 15 each year until July 15, 2050.

Each instalment represents 2.5 per cent of the principal amount, spreading repayment evenly over 20 years. The payment currency is the US dollar, and the interest charge is based on a reference rate plus a variable spread, subject to agreed ceilings and floors

With repayments deferred for several years and disbursements tied to performance, the agreement places the burden on states not just to spend, but to deliver verifiable results in data quality, asset management, and the long-term integration of displaced persons into Nigeria’s development framework.

The World Bank Group remains Nigeria’s largest single creditor, accounting for $19.39bn of the total, comprising $18.04bn from the IDA and $1.35bn from the IBRD. This represents 41.3 per cent of the country’s external debt, underscoring the bank’s dominant role in financing Nigeria’s development initiatives.

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The PUNCH earlier reported that the World Bank loans to Nigeria between 2023 and 2025 are projected to reach $9.65bn by the end of this year as fresh approvals, ongoing negotiations, and disbursements gather pace across key sectors.

The amount covers International Bank for Reconstruction and Development and International Development Association loans only, according to an analysis of data on the bank’s website by The PUNCH. When grants are added, total World Bank support rises to about $9.77bn within the three-year window.

The International Bank for Reconstruction and Development provides loans on commercial or near-commercial terms to middle-income and creditworthy low-income countries, while the International Development Association offers highly concessional loans and grants to the world’s poorest nations.

The PUNCH also reported that Nigeria’s stock of World Bank International Development Association loans rose to $18.5bn, making it the largest IDA borrower in Africa and the third-biggest in the world.

Fresh data from the IDA’s unaudited financial statements for the third quarter of 2025 confirmed that the country has maintained the ranking it first attained in 2024, when it climbed to third place after overtaking India. The country was the fourth-largest borrower in 2023.

According to the report, Nigeria’s exposure increased from $17.1bn in September 2024 to $18.5bn in September 2025, representing a rise of $1.4bn or 8.2 per cent. The increase reflects the country’s heavier reliance on concessional financing to plug infrastructure gaps, stabilise its reform programme, and support social spending amid volatile oil earnings.

Economists warn that the rising loan pipeline, while potentially beneficial for long-term development, could deepen fiscal pressures if not matched with stronger domestic revenue mobilisation and prudent expenditure management.

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Nigerian states’ revenues rise 93%, but education spending drops — World Bank

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The World Bank says Nigeria’s 36 states recorded a 93 per cent increase in revenues between 2023 and 2025 but education received a declining share of the sector’s expenditure.

The bank disclosed this in its latest Nigeria Development Update, which examined how increased public revenues have influenced spending priorities across the federation.

The report was made available to the News Agency of Nigeria by the World Bank in Washington D.C.

According to the report, states’ aggregate revenues rose by approximately 93 per cent in real terms, while expenditure increased by 92 per cent during the period.

The report attributed the improvement partly to exchange-rate reforms, petrol subsidy removal, stronger revenue administration and increased allocations from the federation account.

It said states also benefited from refunds, settlement of longstanding federal obligations, intervention funds, and stronger Value Added Tax collections.

However, education’s share of total state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025, according to the report.

Health expenditure remained broadly stable at approximately seven per cent, while social protection’s share increased from 1.4 per cent to 4.4 per cent.

The bank said capital expenditure increased significantly, accounting for 61 per cent of state spending, compared with 46 per cent previously.

Transport infrastructure recorded the largest increase, alongside substantial spending on housing, agriculture and other economic investments.

The report quoted Mathew Verghis, the World Bank Country Director for Nigeria, as saying that increased revenues provided the opportunity to improve infrastructure, education, healthcare, and water services.

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He said greater spending efficiency, accountability and improved service delivery were essential to ensuring that additional public resources benefited Nigerians.

The bank acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue.

It, however, stressed that stronger investment in human capital was necessary to translate economic reforms into sustainable employment and improved living standards.

The report also projected average economic growth of 4.4 per cent between 2026 and 2028, subject to sustained reforms and improved service delivery.

It urged federal and state authorities to ensure that increased public revenues translated into tangible improvements in Nigerians’ welfare.

NAN

Source: punchng.com

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Nigeria promotes investment without building production capacity – UNILAG don

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A professor of Comparative Political Economy at the University of Lagos, Adelaja Odukoya, has asserted that Nigeria’s economic policies promote investment without sufficiently strengthening domestic production.

Odukoya argued that the contradiction had weakened the country’s productive foundations, with policies encouraging investment and entrepreneurship while failing to create the technological capacity, productive employment and processing industries needed to drive sustainable development.

Odukoya spoke at the maiden edition of the Adeleke University Toyin Falola Annual Lecture, held on Thursday at the Performing Arts Theatre, Adeleke University, Ede.

The lecture had as its theme, “History, Power and Accumulation: Reimagining Africa in the Globally Disorderly Order.”

Odukoya identified several contradictions in the way the Nigerian state manages economic activity.

He said, “The state promotes investment without creating conditions for technological transfer. It encourages entrepreneurship without generating sufficient productive employment.

“It expands primary-product exports while leaving processing capacity undeveloped. It constructs infrastructure without establishing strong linkages with domestic production.”

According to him, the contradictions explain why increased economic activity and accumulation do not necessarily translate into development.

“Accumulation is not synonymous with development,” Odukoya stated.

He argued that genuine development should be measured by the expansion of productive, technological, institutional and human capabilities.

“A country could attract investment, export minerals and agricultural commodities and record economic activity while still failing to build the domestic industries and technological capabilities required for long-term development,” he said.

His argument was echoed by Prof Toyin Falola, who said Africa’s vast natural resources would continue to reinforce dependency unless governments developed the industrial, technological and institutional capacity to transform them into productive power.

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Falola said Africa’s resource problem was not simply one of historical exploitation, but also the continent’s failure to convert its resource endowments into power.

“The issue, however, is not just to repeat the history of exploitation. It is more important to know how Africa turns its great resources into power,” Falola said.

He argued that Africa could not afford to remain a spectator as global economic and geopolitical arrangements continued to change, stressing that resource ownership without the capacity to add value would not guarantee influence.

Falola said the continent required a combination of knowledge, government policy and industrial capacity to change its economic position.

“There must be universities that generate new knowledge; there must be governments that translate this knowledge into policies; there must be industries that add value to the continent’s natural resources,” he said.

He added that Africa needed more than improved infrastructure and stronger economies if it wanted to exercise greater influence in the global system.

“The future of the continent will require more than just better infrastructure, improved economies, and more effective political institutions,” Falola said.

Source: punchng.com

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Import waivers, insecurity end two-year agric trade surplus

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Import waivers meant to ease hunger and insecurity on farms have led to a deficit, ending a two-year run of surpluses, as Nigeria’s agricultural trade balance swung from a N740.27bn surplus in the first half of 2025 to a N56.13bn deficit in H1 2026, according to agriculture and trade experts.

Recent foreign trade data from the National Bureau of Statistics showed that agricultural exports fell by 33.28 per cent, or N985.14bn, to N1.98tn in H1 2026 from N2.96tn in H1 2025.

Agricultural imports fell by only 8.50 per cent, or N188.74bn, to N2.03tn from N2.22tn over the same period. The gap between the two movements produced a N796.40bn swing in the trade balance.

Nigeria recorded a N365.74bn deficit in H1 2023, when imports of N926.25bn far exceeded exports of N560.51bn. The balance then turned to a N194.92bn surplus in H1 2024 before it widened to N740.27bn in H1 2025.

In separate phone interviews with The PUNCH, Agribusiness experts, including the Chairman of the Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group, Tunde Banjoko, explained that recent government policy led to the shift.

Banjoko said, “Some waivers were given for products like palm oil and rice, and the import tariffs were drastically reduced. It became more favourable for people to import than to patronise local producers.”

He said the waivers on food commodities hurt domestic producers, even though lower tariffs on tractors and manufacturing equipment helped them.

According to Banjoko, “The effect is that our imports will rise above our exports. Second, we will discourage local production. Thirdly, we will be reducing employment, because some factories will shut down if they are not able to compete.”

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Banjoko also said weak funding for processors compounds the problem. He said foreign direct investment flows mainly into the capital market rather than into production and processing, so local processors cannot scale.

He urged the Federal Government to speed up the Special Agro-Industrial Processing Zones programme. “We should speed up such projects where we can produce enough for our country and start exporting, not look for shortcuts by reducing prices,” Banjoko added.

Meanwhile, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, identified two major factors behind the deficit. He said the first was the Federal Government’s decision to allow some food imports to tackle runaway inflation.

Yusuf said, “The first is the decision of the government to allow for some food imports as a result of the challenges of food inflation, which at a point was getting almost completely out of hand.”

He added that insecurity worsened the supply gap and cut export capacity, stating, “Insecurity led many farmers to leave their farms. Many of them have ended up in IDP camps, and quite a number have completely abandoned farming.”

He added that farmers cannot export without output. Yusuf said, “You can only export when you have the output.”

Yusuf also said high input costs and falling produce prices have discouraged farming. He said, “Most of these inputs are imported, so the exchange rate situation has seriously affected the cost of inputs, and the prices of produce have gone down.”

He urged the Federal Government to cut the cost of fertiliser, agrochemicals, machinery and improved seedlings. He also called for a minimum guaranteed price for agricultural produce.

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Yusuf said, “The government can establish a threshold below which, if prices fall, it will give farmers some compensation. That is the way it is done in many other economies.”

Source: punchng.com

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