Refugee economies: misplaced extrapolation?
Published: 2 Jun 2015
By: David Kigozi
It is always good when research undermines the image of refugees as victims. However, there is a fine line between promoting a positive image of refugees and underestimating the levels of hardship that many face. A report released in June 2014 by the Humanitarian Innovation Project, University of Oxford, “Refugee Economies: Rethinking Popular Assumptions”, (Alexander Betts, Louise Bloom, Josiah Kaplan and Naohiko Omata) certainly achieves the former in as much as it focuses positively on the “economies” of refugees in the city of Kampala and in Nakivale and Kyangwali refugee settlements in western Uganda. However, it also uses very specific data to make a number of statements about the broader Ugandan context which, unfortunately, cannot be sustained and could create the mistaken impression that life for refugees in Uganda is economically easy. This is far from the case for the majority.
Currently, refugees in Nakivale and Kyangwali settlements represent only just over a quarter of all recognised refugees in Uganda. Therefore, the extrapolation of the study’s findings to Uganda as a whole may give a false impression because it ignores contrary conditions for the remaining three quarters of the refugee population.
For example, following a statement that “there is evidence of dense economic interactions between refugee communities of different nationalities within the [two] settlements”, (page 10), the report immediately goes on to conclude that “[s]ettlements in Uganda normally host refugee populations from several different countries” (p. 10). Whilst this might be accurate for the settlements the researchers visited, this is not the case in the refugee settlements in Adjumani District, for example, which IRRI has visited a number of times, most recently in March 2015 and hosts predominantly South Sudanese refugees with only 85 refugees from other nationalities out of a total of 93,135, as of December 2014.
And although the research is about “refugee economies” it leaves out a number of important economic factors that would have helped the reader to better appreciate the real economic life of the refugees in these two settlements.
Refugees and global trade networks
In line with the paper’s section on “Refugee livelihoods as part of global trade networks” which is described as a “rejoinder to the notion that refugees’ economic lives are predominantly isolated” (p.14) and seeks to prove “refugees’ involvement in global value chains” (p.14), the executive summary states that “[r]efugees are networked within settlements, nationally, and transnationally. Both refugee and Ugandan traders connect refugee settlements to wider economic systems” (p. 5). However, such trade networks are almost non-existent in a number of other refugee camps in Uganda, including those in Adjumani District, which have little or no agricultural production and are not visited regularly by Ugandan traders.
In this section of the report, an attempt is made to describe the link between refugees in Nakivale settlement and global trade networks. While it is good to dispel the myth that refugees are always economically isolated, it is also important to indicate clearly that the information subsequently provided mainly discusses a very specific group of refugees (Somalis) in a specific context (Nakivale). The words “Somali” or “Somalis” are mentioned at least 15 times on page 14 and it is only towards the end that other nationalities are mentioned – a Burundian refugee who is a housing and construction broker, and several Congolese brokers in plastic products in Kampala. While highlighting these experiences is laudable in that it shows the potential for refugees to be economically productive, it is also concerning to present it as the norm in Nakivale settlement and beyond. The fact is that the majority of refugees in Uganda live at subsistence level and are, at best, only distantly and indirectly connected to international trade in terms of selling their small surplus produce to middlemen.
Economic security and wellbeing of refugees
In depicting the “economic life” of refugees, the research aims to show that refugees are seeking solutions to their economic challenges by “doing it for themselves” through integrating “within vibrant and complex economic systems.” While it is refreshing to see examples of the ingenuity of refugees highlighted, once again the broader context seems to be missing.
The research seems to use incomes, and to a lesser extent profits, as indicators of the refugees’ economic wellbeing. As such, it would have been helpful if the report brought out, in quantitative terms, the estimated volume or value of business in the settlements. Providing estimated average household incomes, and how this compares to the local average household income, would also have helped in painting a comprehensive picture of refugees’ economic lives. In addition, the study almost totally ignores other aspects of wellbeing including healthcare, education, water and sanitation, and yet these are all important to understanding the broader context.
Omission of other important economic factors
The report focuses on “economies” in a predominantly agricultural setting yet the study fails to give an idea of the size of land per household or estimated crop production per household. For example, while refugees in Nakivale may have a plot of land approximately 100 x 30 metres, in many other areas they have only 20 x 30 metres or less. While in Nakivale the land may be fertile, this is not always the case and, in fact, the opposite is likely to be true given that refugee camps are often built on land that was previously uninhabited, including wetlands. This omission creates a distorted picture of the income, profit and economic life of refugee communities more broadly.
Furthermore, no mention is made of the fact that the seller of agricultural produce to external traders in a settlement is usually not the producer. Indeed, trade activity in both settlements is characterised by “Ugandan traders [who] do business with middle-men, which saves them the hassle of collecting small surpluses from individual farmers.” Therefore, although the total volume of agricultural business in the settlements could be significant, for many refugees, who often sell a small surplus and reserve an amount as seed for the next season, the production per household is often just slightly above subsistence levels.
In addition, the research talks about refugees as a source of labour (p. 20), stating that in the settlement areas, a considerable number of refugees work for Ugandan landowners as cultivators. Whilst this might be an accurate statement with regards to Nakivale and Kyangwali, this is not the case in some of the other settlements in Uganda. In addition, the report does not give any idea of the daily wage when refugees sell their labour to nationals on their farms. For example, during a visit to Nakivale settlement in 2012, IRRI found that while there were hundreds of Burundian refugees who cultivated crops owned by nationals, the remuneration was very small and, therefore, exploitative.
The study also talks about commercial or business exchange between Ugandans and refugees in the settlements. However, this is often an unequal exchange in which refugees are vulnerable to exploitation. On page 13, Ronnie, a Ugandan crop wholesale trader in Hoima, says that he bought about “500 tons of maize and beans from Kyangwali” during the harvest season, but this statement raises more questions than answers:
- What is the size of the land on which these 500 tons were grown?
- What is the approximate number of refugees who supplied the 500 tons? (Is it possible that refugees with means, or with loans, or Ugandans from outside the camp, are able to assemble these tons from hundreds of poorer refugees at low prices?)
- Did the trader buy the produce from small holder farmers or from a middleman?
- What price did he pay for the 500 tons – was it the market price? And how do prices in the camp (e.g. for maize and beans) compare with those outside the camp?
Page 17 features a retired executive of the Kyangwali District Council who is now a farmer and whose customers are mostly refugees. He told the researchers that refugees were important customers for many local shops in the area. Whilst this is an interesting example of the benefits refugees can bring to the local community, it is just that, one example. For this to be applicable to a broader context, it would be helpful to know how many refugees (or what percentage of them) can afford to shop on a regular basis? Is this group significant enough to be representative of the whole refugee community in Nakivale or Kyangwali, let alone the whole of Uganda?
The findings state that “Refugees contribute to the host economy of Uganda not only through buying and selling, but also by creating employment.” (p. 19). Whilst the majority of the employment is of refugees – either as self-employed (around 38% of the 1,593 refugees surveyed) or as employees – in Kampala, 40% of those employed by refugees were Ugandans and in the rural settlements this was 14%. However, in as much as this may be true, refugees who are creators of employment are a minority in relation to refugee numbers since, from the report, the total number of refugees in the three areas adds up to 135,000 by the time of the survey.
In addition, the kind of economic activities described in the research findings are not typical of all refugee settlements in Uganda. In Adjumani District, for example, it is rare to find a camp-based refugee who has something to sell (except from their food rations at times) and the majority have little or no means to purchase anything that is not a basic necessity. In Nyumanzi refugee settlement, for instance, there are still only a few shops owned by refugees, established from small loans from an NGO, alongside shops owned by Ugandans. During a visit to Nyumanzi in March 2015 these refugee shop owners were still struggling to pay back the loans a year later.
Freedom of movement and “refugee economies”
The report says that “[i]t has long been recognised that a better alternative to protracted limbo and long-term encampment is ‘self-reliance’ – essentially finding ways to offer refugees freedom of movement, the right to work, and support in the pursuit of their own economic opportunities…” Indeed, Section 30 (1) of Uganda’s Refugees Act states that “a recognised refugee is entitled to free movement in Uganda” which, according to Section 30 (2), is “subject to reasonable restrictions specified in the laws of Uganda”.
However, although it is clear that restrictions on the free movement of refugees and the right to work have become increasingly relaxed, this assertion does not give the full picture. In the case of the former, although freedom of movement for refugees exists in Uganda at a policy level, it needs to be nuanced at a legal and practical level. While it is true that refugees in Uganda can travel almost anywhere in the country, they are still technically required to secure permission from the settlement commandant to travel outside the settlements, although this is not strictly enforced. Of course, while refugees constantly subvert restrictions on their movement, they can become vulnerable as a result.
The research rightly states in the recommendations that “[r]estrictive refugee policies will limit the capacity of refugees to engage with markets in ways that can lead to sustainable opportunities. When refugees are given the right to work and freedom of movement, they are capable of making a contribution to the national economy.” (p. 41). However, the research findings recognise that refugees in Nakivale and Kyangwali settlements do not typically venture outside those designated spaces to transact business. “Populations in both sites tend to remain within their settlement borders when conducting livelihood activities: for instance, out of 621 self-employed refugee businesspeople in Nakivale and Kyangwali ….less than 10% regularly venture outside the settlement to earn a living.” Yet the study does not interrogate the reasons for this.
At the same time, the research findings state that a significant number of Ugandans visit the settlements on a daily basis from neighbouring villages and cities such as Hoima, Mbarara and Kampala to purchase products and services. “They are supported by Ugandan regulations which permit local nationals to freely move in and out of refugee settlements as long as they hold formal permission. Such visits play a central role in the economic life of many refugees.” (p. 11). It is the freedom of movement of Ugandans, and not that of refugees, which is more prominently highlighted in these trade transactions.
Therefore, while it is well known that Uganda has the best practice in the region in terms of refugee freedom of movement, and is usually taken as a model in terms of refugee policy in this regard, the other side of the story should not be overlooked.
The bureaucratic restrictions mean that, in practice, refugees find it cumbersome to travel, which prevents many of them from selling their produce outside the settlement where prices are better. Previous research has shown that the potential for travel is undermined because a refugee may not secure a permit from the settlement commandant exactly when he or she needs it and perhaps not when the crops can still be sold as this is a time-consuming and unpredictable process.
The costs of uncertainty are compounded by simple transaction costs, travel to and from the commandant’s office, a trip that could take at least an hour one way, the time spent waiting for the permit, and inflexibility regarding the day and time the permit can be granted by the settlement commandant. This amounts to uncertain access to external markets, which prevents refugees from being able to plan properly and encourages immediate sales. Given that most refugees are living at subsistence level, it may not make economic sense for them to travel to Hoima or to Mbarara to sell their produce at better prices because of the transport costs to and fro. It is little wonder, then, that refugees sell their produce to “richer” refugees or local middlemen who come to the settlement.
There is no doubt that unrestricted freedom of movement for refugees (i.e. without the need for movement permits), accompanied by the right, for those who are able, to choose where to live, work and do business, would enhance the economic life of the majority of refugees in Uganda. And even though Uganda is often described as a country in which the government has taken the positive step to allow refugees the right to work and a significant degree of freedom of movement, this assertion does not give the full picture.
By way of conclusion
While rightly promoting the image that refugees are seeking solutions to their own economic challenges and are succeeding in bettering their situations in this regard, it is clear that some key issues are neatly left under the carpet. This inadvertently helps to maintain the status quo in refugee protection instead of seeking to address the flaws in the system. Nevertheless, relying on quantitative data based on a survey of 1,593 refugees in the three locations visited, in addition to qualitative research, the report has a solid basis from which findings that are specific to the refugee locations in question can be made. The report has done this to a significant extent.
One critical statement that the report makes right at the beginning, and which can be taken as a realistic assessment of the current “durable solutions” approaches and policies, is as follows: “[e]xisting approaches to protracted displacement are failing. They are inefficient, unsustainable, and lead to dependency. A humanitarian response designed for the short term too often ends up administering long-term misery. Rather than transitioning from emergency relief to long-term reintegration, displaced populations too often get trapped within the system.”
Building on the relevant body of literature that has called for an overhaul of existing refugee approaches and policies over the years, and seizing the opportunity provided by the new UNHCR Policy on Alternatives to Camps, drastic changes, particularly the de-emphasis of refugee camps as a default policy for responding to refugee influx, can be made to enable refugees live a more dignified life in line with their rights and choices. This may take some time but it can be done. And this report needs to be used as a call for action, rather than an excuse for inaction.
 “UNHCR Operational Update for the South Sudan Emergency,” Kampala, 04-10 December 2014.
 Omata and Kaplan, page 17, October 2013.