Nairobi, May 4, 2018—Refugee communities
represent a promising opportunity for private investment in sub-Saharan
Africa, according to a groundbreaking study that has identified a growing
$56 million consumer market in just one location—Kakuma Refugee Camp in
north western Kenya.
by IFC, a member of the World Bank Group, with the support of UNHCR—is
the first to assess an African refugee camp as a marketplace. It indicates
that private sector engagement in refugee settings can promote self-reliance
and socio-economic integration between refugees and host communities, thus
empowering them both.
Among the study’s key findings: household
spending in the 25-year-old camp and the neighboring town totals at least
6 billion Kenyan shillings ($56 million) —half of which is spent on consumer
goods such as food and personal-care items. The camp, home to 180,000 refugees
as of March 2018, also has a vibrant,
informal private sector
including more than 2,000 shops run by
refugees and local Kenyans. Nearly seven out of 10 residents own a cell
phone, making it a potentially attractive market for mobile banking.
Although many refugees in the camp still
rely primarily on humanitarian aid, the study says that attracting new
private investors could provide long term solutions for refugees by supporting
local businesses and thus increasing work opportunities. Engagement of
the private sector could further expand the prospects for providing sustainable
improved services in the areas of healthcare, energy, education. also reduce
prices, provide more choices and strengthen self-reliance among refugees.
“Conflict, violence, and persecution are
driving more people from their homes than at any time since World War Two,”
said IFC Chief Executive Officer Philippe
Le Houérou. “Government aid to tackle the challenge is limited. Private
sector investment could make an important difference—by creating jobs
and opportunities for refugees. But investors often lack the critical information
they need to venture into these markets. This study is a key first step
to boost private investment into an untapped market.”
“Too often refugee camps are associated with
aid dependency. This ground-breaking IFC study reveals Kakuma’s vibrant
economic and commercial life offering opportunities for both refugees and
local communities. I am confident that this cooperation with IFC will stimulate
additional private sector interest,” said Filippo Grandi, United Nations
High Commissioner for Refugees.
The IFC study examined the Kakuma refugee
camp and town through the lens of a private sector firm looking to enter
a new market. Researchers surveyed 1,400 refugee and host-community households
to collect data on consumption levels, consumer preferences, financial
literacy, access to finance, telecommunications, and business ownership.
The study argues that private investment could be stimulated by introducing
new models of financing—including co-financing that uses matching funds
to enable a combination of interest-free loans and grants to benefit both
refugees and local host communities.
The study received funding and support from
Ireland, the Netherlands and Norway, through IFC’s Conflict-Affected Situations
in Africa Initiative.
IFC—a sister organization
of the World Bank and member of the World Bank Group—is the largest global
development institution focused on the private sector in emerging markets.
We work with more than 2,000 businesses worldwide, using our capital, expertise,
and influence to create markets and opportunities in the toughest areas
of the world. In FY17, we delivered a record $19.3 billion in long-term
financing for developing countries, leveraging the power of the private
sector to help end poverty and boost shared prosperity. For more information,
Established in 1950, UNHCR, the UN Refugee
Agency, is the largest global organisation dedicated to saving lives, protecting
rights and building a better future for refugees, forcibly displaced communities
and stateless people. We work in 130 countries ensure that everybody has
the right to seek asylum and find safe refuge. An unprecedented 65.6
million people around the world have been forced from home, many under
the age of 18. Many have been denied access to basic rights
such as education, healthcare, employment and freedom of movement. In a
world where nearly 20 people are forcibly displaced every minute
as a result of conflict or persecution, our work UNHCR role is to provide
protection and find lasting solutions that empower refugees. During our
lifetime, we have helped well over 50 million refugees to successfully
restart their lives.
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