Displacement Economics: Uganda Reaps From Enterprising Refugees

Displacement Economics: Uganda Reaps From Enterprising Refugees

They are upwardly mobile, connected to the global community and contributing to their country’s bottom line. Far from being social burdens or economic problems, a new Oxford University study has found that refugees can have a positive economic impact on their host country.

The study by the Refugee Studies Centre at the University of Oxford focused on Uganda, a country that provides refugees with greater freedoms to move around and work than other host countries. It is this freedom that researchers say is helping refugees to make their own way in the business world and to build a new life in their new country.

Alexander Betts, Professor in Refugee and Forced Migration Studies at the University of Oxford and the lead author of the report, said the findings had the potential to blow apart the myth “that refugees are passive individuals who only rely on aid”.

Almost all – 99 percent – of the refugees included in the study said they were now earning their own income.

While the 44-page report, ‘Refugee Economies: Rethinking Popular Assumptions’, shows that many refugees in Uganda do rely on humanitarian assistance, most are more dependent on their own social networks and aspire to receive other forms of support.

In many cases, they create sustainable opportunities for themselves, and make enough money to afford basics like food, water, shelter and clothing.

Researchers surveyed 1,593 refugees from Congo, Rwanda, Somalia, Burundi, South Sudan, Ethiopia, and Eritrea who were living in the Nakivale and Kyangwali settlements, or in Kampala during 2013.

In addition to qualitative studies, they also interviewed Ugandan nationals, government officials, business representatives, and staff from the Office of the United Nations High Commissioner for Refugees (UNHCR).

The report dispels the myth that members of refugee communities stick largely to themselves and resist integrating. It found that 36 percent of refugees who run businesses relied on people of nationalities other than their own as their main customers.

“We encountered many clear indicators of economic interdependence between refugees operating in [local] markets and trading centres,” the authors write.

“As one example, market stalls along the main market street of Base Camp 3 – the primarily Somali-concentrated village in Nakivale – display rows of agricultural produce such as tomatoes, cabbage, and beans. Since the vast majority of Somali refugees do not engage in farming, Somali vendors in Base Camp 3 rely instead on purchasing these crops from Congolese, Rwandan, Burundian and other refugee farmers inside the settlement.

“Non-Somali refugees, in turn, benefit from the opportunities provided by Somali business. Congolese and Rwandan refugees purchase certain types of merchandise, such as electronic and beauty items, from the well-stocked Somali refugee traders that are unavailable elsewhere in Nakivale.

“When they need to travel to Kampala and Mbarara, non-Somali refugees also use a Somali-run mini-bus service. Interestingly, some Congolese refugees are also employed by Somali families for construction and domestic work.”

Refugee Employers

Refugee-run businesses also provided an important service to Ugandan nationals: when asked who their most important customers were, 26 percent of refugees surveyed in Nakivale and Kyangwali identified Ugandan nationals as their largest buyers.

Some 40 percent of refugees were also employers who provided work for Ugandan nationals.

The report’s authors argue that refugees can bring economic benefits to a host country, contradicting the widely held assumption that refugees are a drain on local resources.

“Refugees have a range of different occupations and trades to offer, with some being successful entrepreneurs [and] they often benefit the economy of the country where they settle,” said Prof Betts.

“In Uganda, refugees have more rights than in many other host countries, but this study shows that given basic freedoms, refugees often find a way of earning enough to live on.

“The situation in Uganda can be regarded as a success story as its refugees are making a positive contribution to the country’s economy.”

Uganda’s refugee population is technologically literate and switched on to both local and global communications, which is instrumental in helping them to find revenue streams and implement new business ideas.

“Refugees are often highly networked individuals who are not only operating from within the refugee settlements but also nationally and internationally,” said Prof. Betts.

In fact, the study found that refugees living in Uganda had higher levels of internet use than the general population and used mobile phones extensively.

Of the refugees living in cities, 96 percent use mobile phones and just over half had internet access. Even in rural areas, 71 percent of refugees used mobile phones and 11percent had internet access.

The research was conducted as part of Oxford University’s Humanitarian Innovation Project, which aims to show host countries how they can build upon the skills, aspirations and entrepreneurship of refugees. The project is funded by philanthropists and based on a partnership agreement with UNHCR.