YOLA, Nigeria—The battle began with two small drones buzzing over a base where more than 500 Nigerian troops guarded the shores of Lake Chad. Then came the clatter of gunfire from a column of armored cars, artillery units and tanks that also blasted jihadist battle songs from mounted speakers.
Within hours, elite forces from one of Africa’s most powerful militaries had abandoned their base and its cache of heavy weapons, routed by an insurgent army fighting under the familiar black and white flag of Islamic State.
“We were sitting ducks,” said Bitrus Madu, a Nigerian sergeant who fled the base in the town of Baga in December and walked through forests for three days to reach safety. “The terrorists control the whole region now.”
In recent months, as Islamic State has seen its self-described caliphate in Iraq and Syria radically shrink, a Nigeria-born group calling itself the Islamic State West Africa Province, or ISWAP, has taken control of hundreds of square miles of territory, according to Nigerian and Western officials.
The group’s rapid rise, largely away from public view, foreshadows the next chapter for Islamic State. Its local allies are expanding in a flurry of far-flung states, battling local armies and carving fundamentalist enclaves in Afghanistan, Mali, the Philippines and Somalia. Islamic State’s threat to regional governments and the West is likely to continue, U.S. intelligence chiefs said in a formal risk assessment last week.
The militant group Islamic State West Africa Province, or ISWAP, has in recent months taken control of a large area in northeast Nigeria bordering Niger, Chad and Cameroon. The group is an offshoot of Boko Haram, which operates to the south.
The ISWAP faction, established in 2016 after a violent split within Nigeria’s Boko Haram insurgency is entrenching itself in the borderland communities around Lake Chad, forging state structures. It controls trade routes, taxes the local fish industry, regulates agriculture and imposes its extremist brand of Islamic justice.
The picture that emerges—based on interviews with soldiers, refugees, intelligence officers, arms smugglers and diplomats in Nigeria and Niger, as well as to people who participated in talks with the faction—is of a well armed and motivated insurgent group that expects to establish a state out of strategic geography where the U.S. is dialing back its military presence. There is no sign the group seeks to attack Western targets beyond its homeland.
In contrast to Boko Haram and its infliction of carnage on civilians, ISWAP’s estimated 5,000 men focus their attacks on security forces and nongovernmental organizations, following tactical advice sent from Syria to spare the war-weary population.
Seasoned fighters from West Africa who once traveled to Libya and the Middle East have returned to augment ISWAP ranks. ISIS theologians have sent written instructions, viewed by The Wall Street Journal, to cease attacking schools and markets and stop preaching that the Earth is flat.
The group has overrun and looted a dozen military bases, leaving hundreds of soldiers dead and seizing huge stockpiles of weapons, weeks before Nigeria, Africa’s largest democracy, holds a presidential election. Nigerian security officials call it a far bigger threat than Boko Haram, given its sophistication and popular support.
“The weapons are being smuggled from Islamic State in Libya to their factions in Nigeria and Mali,” said an arms smuggler in Niger named Yusuf as he flicked through images of Dushka machine guns and other weapons he claimed to have ferried across the desert. “These groups want to create a big domain. They want their own country.”
Many Nigerian officials no longer talk about defeating the insurgency, merely containing it. “On security, the point must be made that we are not where we expected to be. We must admit that,” said Festus Keyamo, a spokesman for the re-election campaign of Nigerian President Muhammadu Buhari. “However, we have made some progress” since taking over in 2015, he said.
Nigeria’s military hasn’t provided a death toll of the struggle against ISWAP, and it has sought to muzzle reporting. Armed soldiers in January simultaneously raided two offices of Daily Trust, the newspaper of record for Nigeria’s north. Asked about the raids, an army spokesman said the newspaper undermined national security.
It wasn’t possible to reach the group. Its internal news channels on the encrypted app Telegram—including one called al-Hakik, or “the credible”—give a sense of how it wishes to be seen. The news channel operates in part as a kind of jihadist Instagram, with fighters sharing photos of themselves enjoying sunsets over Lake Chad or dressed for battle. News items announce sumptuous harvests from farmers, including displaced people who have been invited back to the area to farm.
Led by a reclusive young commander called Abu Musab al-Barnawi, the faction now holds an enclave across Nigeria, Niger and Chad, according to unpublished U.S. military maps. It has dug wells, handed out seeds and fertilizer and provided safe pasture for herders, according to traders and herders who move between the region ISWAP controls and refugee camps in the Nigerian city of Maiduguri.
“If we obey their rules, they let us trade. They let us farm,” said Garba, a trader. Aid agencies report that some of the 1.5 million Nigerians who have spent much of the past decade in the refugee camps are returning to areas where the jihadists hold sway.
Much about ISWAP remains a mystery. Analysts are divided over whether it is centralized around Mr. Barnawi’s authority or scattered across autonomous brigades. The group hasn’t declared a caliphate, making it hard to assess its territorial control across a vast region where fighters blend with villagers.
Dialogue between the faction and Islamic State commanders in Libya and beyond is regular, according to African, U.S. and European intelligence officials. When Islamic State was at its height in Syria, it sent money and orders to the Nigerian franchise, dictating matters ranging from promotions to hostage-negotiation techniques to strategy, say people who have dealt with the group.
It is in this context that one of the world’s largest exercises in democracy will take place Feb. 16. Mr. Buhari, once a military dictator but an elected president since 2015, is running for a second term by touting progress he has made tackling Boko Haram.
He pushed that group out of land it controlled and now describes it as “technically defeated,” but has struggled against the Islamic State group. His military is stretched, deployed against pirates and oil thieves in the south and having to police religiously tinged battles over farmland in central regions. Governors and security analysts say ISWAP’s offensive could frustrate efforts to hold elections in parts of northeastern Nigeria.
Islamic State formally entered Nigeria’s conflict in 2015, less than a year after Boko Haram shot to global infamy by kidnapping 276 schoolgirls from the town of Chibok. In March 2015, Boko Haram leader Abubakar Shekau pledged allegiance to Islamic State caliph Abu Bakr al-Baghdadi. Islamic State was near the peak of its power at the time, controlling territory in Syria and Iraq and welcoming thousands of foreign fighters each month.
Islamic State sent money and training to improve the quality of Boko Haram’s propaganda videos. Boko Haram asked Islamic State for advice on issues its members argued over. Among them: Is it a sin to hold a government ID? Should we attack schools? Is the Earth flat?
In a tract titled “Nigerian Questions,” a senior Islamic State theologian from Saudi Arabia weighed in: Carrying a government ID could be permissible, depending on the circumstances. Boko Haram should now focus attacks on military and security forces.
“For your information,” he wrote, “the Earth is spherical.”
Mr. Shekau found himself on the losing side of those arguments. Mr. Barnawi’s competing faction wrote to Islamic State accusing Mr. Shekau of “twisting the scripture” to create “a Caliphate of Bloodshed.” Islamic State spotted an opportunity to sponsor a coup and hew Nigeria’s jihad closer to its vision, intelligence and other officials say.
In August 2016, Islamic State announced Mr. Barnawi as the new governor, or “wali,” of its West African franchise. The move prompted vicious fighting between the factions across Nigeria’s northeast, with hundreds of militants killed.
Nigeria’s counterterrorism strategists continued to focus on Mr. Shekau, the boogeyman who had taken the Chibok girls and deployed children as suicide bombers. Mr. Shekau released more than 100 of the Chibok girls in two exchanges in October 2016 and May the next year in return for five imprisoned fighters and a 3 million euro ransom.
Mr. Barnawi meanwhile, kept a lower profile, training fighters and bringing in weapons. He dispatched emissaries to Islamic State’s branch in Libya, which was growing as the group lost ground in Iraq and Syria.
By 2017, ISWAP was regularly hitting military targets in the northern Nigerian states around Lake Chad. Nigerian soldiers, accustomed to fighting the Shekau faction, noticed new tactics and well-trained fighters.
Nigerian soldiers say that increasingly they and ISWAP have the same equipment, but their army often has less ammunition.
“They became much stronger, with much more firepower. We have to break contact and retreat when they engage us,” said Haruna Anwar, a soldier from 157 battalion that was ejected from its base in the town of Metele in November.
Last summer, new videos showed ISWAP using lethal weaponry such as armor-plated, vehicle-borne bombs. They showed a weapons factory and evidence of technology transfer.
ISWAP has sent drones to spy on Nigeria’s army. Its fighters sometimes ride horseback to avoid detection by the surveillance planes and satellite photos tracking them. Learning from ISIS’s defeats in Syria, the group avoided holding population centers, giving warplanes fewer targets to strike.
As the group gathered strength, a veteran Barnawi strategist considered a moderate, Mamman Nur, held informal peace talks with the Nigerian government. The talks, mediated by the Swiss government, became public after Mr. Nur, to show good faith, ordered the return of 104 schoolgirls his fighters had abducted.
Underlings who had wanted to ransom the women felt betrayed, mediators said. In September they put Mr. Nur under house arrest and killed him, according to government negotiators and intelligence agents. The peace initiative collapsed. Soon after, ISWAP killed two Red Cross workers it had taken hostage.
By the later months of 2018, ISWAP’s military offensive had gathered a dizzying momentum. Its fighters were regularly defeating some of Nigeria’s best-equipped units across the heavily fortified northeast of the country. The insurgents started sending Nigerian commanders taunting warnings of when they would attack. Army morale worsened, and more soldiers began to desert.
On December 26, Islamic State launched its most ambitious assault, on the heavily fortified Nigerian military base in the town of Baga and a nearby Naval base on Lake Chad. The compounds contained hundreds of soldiers and some of the most sophisticated weaponry held by Nigeria and its partners from Chad, Cameroon and Niger.
ISWAP trumpeted its rout of the base in videos that interspersed gory images of dead soldiers and torched patrol boats supplied by Germany, with well-stocked markets in areas it controls, exhorting Muslims abroad to come join the fight.
“The rise of Islamic State’s West Africa Province,” read a headline in the January edition of Islamic State’s al-Naba newspaper. “And the decline of the Nigerian Army.”