Refugee Economies in Dollo Ado: Development Opportunities in a Border Region of Ethiopia

Executive Summary

The five Dollo Ado refugee camps were created between 2009 and 2011 in the Somali Region of Ethiopia. According to UNHCR registration data, they host around 220,000 almost exclusively Somali refugees in a semi-arid and isolated border district in which refugees outnumber the host population.

The camps and host community have benefited significantly from the IKEA Foundation's 75m Euro investment in the camps over a seven-year period. This globally unprecedented level of private sector investment has created a range of new opportunities in education, entrepreneurship, energy, agriculture, the environment, and livelihoods.

Most refugees remain poor and dependent upon food aid.

Only 21% of refugees have an income-generating activity, compared with 29% of the host community. The largest source of employment for both communities is with humanitarian NGOs and international organisations, or related government agencies like the Agency for Refugee and Returnee Affairs (ARRA). The median reported income for refugees with a job is 28 USD/month and 105 USD/ month for hosts.

The international community has so far focused mainly on developing livelihoods opportunities in agriculture, livestock, and commerce. Yet relatively few refugee households derive their primary income source from these activities. 4% of refugee households are involved in agriculture (compared with 16% of host households). Animal husbandry is not generally a commercial activity, and less than 2% of refugees have it as their primary income-generating activity, while only 5% of the adult refugee population are self-employed.

For the majority of refugees and host community members, the economy is based mainly on two inter-related elements: aid and the cross-border economy. Food assistance, services such as education and health, and the sources of employment that result from the international humanitarian presence are crucial to the survival strategies of refugee and host community households. But so too is the often neglected cross-border economy with South-Central Somalia.

Dollo Ado town serves as an economic lifeline to the camps and the district, connecting it to the economy of Somalia. 13% of refugees have travelled to Dollo Ado town at least once in the previous year (more than 20% in the two commercially most important camps), and an estimated 200 refugees cross the border bridge in Dollo Ado that leads into Somalia every day. In the nearest camp to the border, Buramino, 12% of refugees admitted travelling back to Somalia during the last year. Many refugees retain family and even property in Somalia, also benefiting from economic opportunity, including through IDP assistance, on the other side of the border.

For many refugee households, the camps represent an important source of social protection. Children and the elderly remain in the camps, where they can receive access to assistance and services such as education and healthcare. Meanwhile, many of the adult men of working age are either based in Somalia or divide their time between the camps and Somalia. Evidence for this comes from the demographic patterns documented in our survey as well as the patterns of food distribution attendance documented by international humanitarian agencies.

The country-specific focus of the international community means that the importance of cross-border dynamics, and the role of the camps within transboundary household strategies, is generally neglected. However, the Dollo Ado economy cannot truly be understood through a purely state-centric lens. It relies upon recognition of the transnational networks that have long shaped the socioeconomic life of the region.

Within the camps, there is also a complex political economy relating to aid. For example, food rations are often sold to host community brokers, who sell them onto businesses such as pasta factories, which then serve as pasta wholesalers to retail shops in the refugee camps. Meanwhile, access to opportunities such as cooperative membership in camps is often mediated by the Refugee Central Committees, which are sometimes accused of favouring the majority clan at the expense of minorities.

Refugee-host relations within the district are exceptionally positive. They share a common 'Somali' identity and culture, language and religion, and the host population derives considerable material and perceived benefits from the presence of both refugees and international humanitarian organisations. This offers an opportunity for socio-economic integration.

The next challenge is to ensure sustainable economic opportunities for both refugees and the host community by creating growth and development within the border economy. This will require building on the legacy of the IKEA Foundation's investment and extending its benefits across the community. Recognising and building upon the realities of the cross-border economy; improving infrastructure and transportation; catalysing growth in the digital economy; creating viable capital markets; developing a formal labour market; moving from a camp to a settlement model; and introducing cash-based assistance all represent some of the untapped opportunities.

Although Ethiopia's refugee-hosting border regions are all distinctive, the report offers insights into the type of evidence needed in order to identify mutually beneficial development opportunities for refugees and hosts in other peripheral regions of the country, such as Gambella, Jijiga, and Shire.

Source: Refugee Studies Centre

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