The Secret (Economic) Life of Refugees

June 20, 2017

by Leslie Meek-Wohl

Despite personal and structural barriers, many refugees not only generate livelihoods for themselves but contribute to the economy of their host country. 

Contrary to economic arguments against refugee resettlement, recent research suggests refugees generate positive economic benefits for their host countries. Recent studies—by the Open Political Economy Network and the Tent Foundation, the University of California at Davis, and the two United Nations organizations—have recently found investment in humanitarian aid and other support for refugees can result in returns for the economy.

A 2014 study by the Humanitarian Innovation Project (HIP) at Oxford University detailed the active economic lives and entrepreneurship of refugees. The study, based on a large-scale field survey of 1,593 refugees in Uganda, found that most refugees in Uganda generate earned income, and nearly one in five operates a business that employs people outside their household. Large majorities of both rural and urban refugees regularly buy from Ugandans. In turn, Ugandans are the largest customers for one-quarter of the businesses owned by refugees. Technology is also actively used by refugees;  nearly one-half of rural refugees and almost all urban refugees rely on mobile phones for electronic payments, market information, or communications with customers and suppliers.

The findings of the HIP study were reinforced on my own recent visit to Rwanda, which neighbors Uganda and also has a large refugee population. I was hosted by Inkomoko, a social enterprise that works with Rwandan entrepreneurs. Inkomoko, a Mastercard Center grantee, has taken an active role in supporting United Nations High Commission for Refugees (UNHCR) and the Rwandan government’s refugee livelihoods programming, which has a strong focus on entrepreneurship. The company enrolls refugee entrepreneurs in its comprehensive, year-long program that provides business consulting services, legal and tax advice, mentorship, classes on topics such as accounting and marketing, and access to its investment fund. It is also expanding the reach of its programming with a less-intensive course designed to address a critical skills gap it has identified among refugees: the need to accurately record business income and expenses and generate financial reports.

Urban refugees at an Inkomoko bookkeeping training. Photo Credit: Johanne Moller, Inkomoko

One of the Inkomoko entrepreneurs I met, Christelle, fled violence and insecurity in neighboring Burundi 18 months ago and settled in Kigali, Rwanda’s economic center and capital city. In her short time in Rwanda, Christelle has established a profitable events management company, which provides her enough income to live outside a refugee camp. Her business has regular customers and employs eight people part-time, two other refugees and six Rwandans. Christelle rents temporary space inside a copy center in downtown Kigali, and she will be moving into her own office next month.

The entrepreneurial drive of refugees like Christelle is particularly noteworthy in light of the barriers they face—lack of documentation and resources, unfamiliar language and customs, an absence of established personal and professional networks, the trauma of having left behind homes and loved ones, and the tendency of people facing an uncertain future to protect their assets and focus on the short term.

In Uganda, the dynamism of refugees may be credited in part to the progressive laws the government has put into place; Uganda is recognized as setting the standard for compassionate treatment of refugees. The country allows refugees to move freely and work outside designated settlements. Refugees in Rwanda benefit from government policies that are following Uganda’s model and support business formation and economic activities. They also receive international aid and assistance from nongovernmental organizations and social enterprises like Inkomoko. This financial and regulatory ecosystem has enabled extraordinary individuals like Christelle and others improve their own lives and those of their families and also contribute to the development of their host countries.

Every minute, 24 people around the world flee their home because of violence or persecution, National Public Radio reported in 2015. As the number of refugees worldwide surpasses 65 million for the first time in current history, policies and support from both the public and private sectors is imperative.

Featured Photo Credit: Inkomoko

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