This archive report was first published on 24 October 2019.
Thriving Economy in Refugee Camps ¶
According to the World Food Programme (WFP), refugees in Kakuma and Kalobeyei camps in northern Kenya have built a thriving economy worth up to $56.6 million.
Launched in 2015, the Bamba Chakula (BC) program, a cash-based intervention designed as an alternative to in-kind food assistance, has been instrumental in this growth.
Under the program, refugees receive mobile currency supplied through Safaricom's M-Pesa and Equity Money, allowing them to choose the food items that suit their preferences, with some restrictions relating to commodities like alcohol and tobacco.
The program has given selected traders exclusive access to the purchasing power provided to refugees through all cash-based assistance, resulting in bustling retail markets and restaurants in the camps.
As of May 31, the United Nations High Commissioner for Refugees (UNHCR) reported that 476,695 refugees and asylum seekers live in Kenya, with 190,181 hosted in the Kakuma camp and Kalobeyei Integrated Settlement.
The WFP estimates that the BC shops in Kakuma received $720,028 in BC transfers and those in Kalobeyei $249,743 during the month of the survey.
However, the report notes that this deviation from the $500,000 figure is likely due to reporting errors or delays in monthly BC spending by customers.
Despite these challenges, the report highlights the success of the BC program in promoting private sector-led development in refugee contexts.
With an estimated market size of around $3 million for the Kakuma camps and Kalobeyei settlement, the overall food market may be worth between $36 million and $56.6 million per year, depending on how it is measured.
The report also notes that refugee men are more likely to own shops than women, with 69 percent of refugee shop owners being male.
However, the opposite pattern can be found among Kenyan traders, with 63 percent of shop owners being female in Kakuma Town and 75 percent in Kalobeyei Town.
Furthermore, the report highlights the importance of credit in transactions between retailers and wholesalers, with more than 60 percent of food retailers stating that their wholesaler(s) offer(s) either bulk discounts, goods on credit, or both.
