Framework for De-Risking Investment in Fragile Context in Nigeria

Preparation of a Framework for De-Risking Investment in Fragile Context in Nigeria

Nigeria faces significant challenges related to conflict and fragility, particularly in the north region, that has led to mass displacement of communities. While efforts to stabilize affected areas and support the return of displaced populations are ongoing, sustainable reintegration remains fragile. Returnees often struggle with inadequate infrastructure, limited access to services, and few livelihood opportunities. 

Addressing these challenges requires more than humanitarian aid but also demands a shift to long term development approaches that rebuild local economies, restore community resilience, and create inclusive economic opportunities for both returnees and host populations. At the heart of this transition lies the challenge and opportunity of mobilizing investment into these fragile regions. 

Public financing, while necessary, is insufficient to meet the vast capital requirements for economic recovery in displacement-affected areas. Fiscal constraints, coupled with multiple competing development priorities, limit the government’s capacity to invest at the scale and speed required. In this context, private sector investment becomes essential. The private sector has a vital role to play in rebuilding infrastructure, generating employment, revitalizing value chains, and providing critical services such as renewable energy, housing, healthcare, water, sanitation, and digital connectivity. Through innovation, efficiency, and the capacity to scale, the private sector can contribute significantly to stabilizing fragile contexts and enabling durable solutions for displaced populations. Yet, in practice, investment in fragile and conflict-affected settings, particularly in regions hosting large numbers of IDPs or returnees, remains extremely limited. The high levels of real and perceived risks deter private actors from engaging. These risks include insecurity and violence, regulatory and policy unpredictability, land tenure disputes, underdeveloped markets, weak financial systems, limited insurance coverage, and reputational concerns. The lack of basic infrastructure and inadequate guarantees of commercial viability make it difficult for private capital to flow into these regions. As a result, displacement-affected areas often remain locked in a cycle of poverty, vulnerability, and exclusion. De-risking private sector investment is therefore a critical priority to unlock new pathways for economic recovery in fragile settings.

Against this background, UNDP as technical lead on development financing solution under the Internal Displacement Solutions Fund of the UN system, is seeking services of a firm to design the framework. This will in part, result from: 

i. Assessing the current investment landscape across conflict-affected regions, with a focus on BAY states (Borno, Adamawa and Yobe) and Benue, identifying high-potential opportunities while unpacking the structural, contextual, and perception-driven barriers that inhibit capital flows. 

ii. Facilitating an inclusive, multi-stakeholder dialogue process, engaging policymakers, private investors, humanitarian and development actors, and affected communities, to co create the foundational pillars and incentives underpinning the de-risking framework. 

iii. Synthesizing local experiences and global best practices to inform the development of an adaptive, evidence-based mechanism for risk mitigation that aligns with both market realities and the humanitarian-development-peace nexus. 

iv. Establishing a monitoring and learning mechanism to ensure iterative refinement of the framework, enable knowledge sharing, and build institutional capacity for long-term implementation and scale-up within Nigeria and other fragile contexts. 

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[UNDP OFFICE NIGERIA

PROCUREMENT UNIT]