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Booming economy of Kakuma, Dadaab draws private sector

Saturday October 16 2010
refugeepix

Refugees have set up several markets in the camps and no longer thrive on handouts entirely. File Photo

They are not just a melting pot of different cultures and nationalities, Kenyan refugee camps are the backbone of a thriving multi-billion shilling industry.

Beneath the façade of humble dwellings, some made from polythene sheets, that dot the Kakuma and Dadaab camps, business is booming.

The turmoil in the region that has driven the refugees from their home countries has turned into a blessing in disguise, especially for NGO executives and traders, its biggest beneficiaries, who rake in millions annually in salaries and sales.

A recent report commissioned jointly by the Kenyan government and the Danish and Norwegian embassies estimates that the total economic benefits from Dadaab refugee camps alone, to the local community amount to $15 million every year.

Besides providing a ready market for milk and other livestock products, the local contractors also rake in income from assignments in the camps.

Even the refugees are business persons in their own right, states the report titled In Search of Protection and Livelihoods: Socio-economic and Environmental Impacts of Dadaab Refugee Camps on Host Communities.

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The refugees run about 5,000 shops in markets within the Dadaab camp, with a total annual turnover running into $25 million. So great is the business in these camps, that the private sector has begun to take note.

A Portuguese energy company, EDP, is involved in a $1.6 million energy project in Kakuma that aims at tapping solar energy for lighting, cooking and irrigation.

The social innovation director at EDP, Guilherme Collares Pereira, says that the refugees and the communities in which they live have “immense buying power and entrepreneurial capacities.”

“New and innovative approaches are needed to convert the poverty into an opportunity for all concerned,” Mr Pereia said on his recent visit to the camp to assess the progress of the project.

Besides the refugees and the local community, workers of the myriad humanitarian agencies that have pitched tent in Northern Kenya are also basking in the presence of the camps. They get fat pay cheques for enduring the harsh weather and insecurity.

A section of the refugee community is uncomfortable with the influx of these agencies, arguing that they end up consuming significant portions of the very aid that is meant for refugees in administrative costs, from the fat pay cheques to the fleet of off road vehicles.
“We want the money to reach us,” Ms Isnino Ali Rage, a community leader at the Ifo camp in Dadaab told UN High Commissioner for Refugees Antonio Guterres recently when he led a team that included government officials on a visit to the camp.

Aid workers benefit

But Mr Guterres would not be drawn into the argument over the humanitarian agencies, instead striking a diplomatic note.

“We are careful with the partners we work with to transform humanity. We also want all the money that we can get to support refugees,” he said.

With the growing number of refugees and the aid that is trickling in to assist them, there is a feeling that the many organisations that are working in the area would like the situation to be indefinitely prolonged.

Proponents of this school of thought argue that this is the reason why the population of Sudanese refugees is still significant, estimated at six per cent of the 411,667 refugees in Kenya. This is despite gradual improvement of the situation in the country.

“Maybe some of them feel that if all the refugees go home they will soon receive their sacking letters,” concurs Francis Baya, an Assistant Minister for Immigration and Registration of Persons. Mr Guterres, the UNHCR high commissioner, dismisses this argument.

“The reason we are not putting pressure on the people from Sudan to return home is not because we want to stay in business; we want to see how the referendum goes first,” he adds.

Among the factors generating the renewed interest in the refugees is the thriving small businesses in the area. Several markets have been set up in the area, each catering for a different nationality.

With the large number of refugees who have taken up business, purchasing power is strengthened and they are no longer the group that was presumed to entirely thrive on handouts.

A visit to Kakuma reveals a display of cultures demonstrated by the dress of the citizens of different countries.

Then there are the huge budgets being invested in the Kenyan refugees. The UN Refugee Agency projects that by next year, its Kenya regional office will take up the highest allocations for East Africa and the Horn of Africa.

Out of the $505 million budgeted for the region in 2011, about $166 million will be spent in the country — an increase from the $155 million being spent this year.

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