Uganda’s open-door policy and land-for-livelihood programme for refugees has been hailed as a game changer for both refugees and host communities, a new report has revealed.
The report, titled ‘Hiding in Plain Sight: Africa’s $27b Displacement Market Opportunity,’ says the policy has created employment and income opportunities for both refugees and host communities.
The government-led settlement model allocates small farm plots to refugees under a liberal legal framework, enabling cultivation and market participation for 1.7 million people, while investments in host districts have gone a long way in helping refugees earn a decent living.
The report says investments in roads, water, schools and aid inflows have catalysed trade and employment for host communities. Guaranteed freedom of movement and the right to work also allow the State to allocate plots, enabling land-based livelihoods, providing starter inputs, extension services and market support, with directed financing to refugee-hosting districts to improve host community outcomes.
Although country-specific figures on revenues generated are not available in the report, it says Africa’s displaced population of 43.1 million people, comprising refugees and internally displaced persons (IDPs), generates an estimated $27 billion (Shs100.8 trillion) in annual income.
‘That is an economy the size of Uganda’s GDP in the 2010s, and Zambia’s today. Yet it operates almost entirely without the financial infrastructure that any comparably sized economy would take for granted: no banking sector, no formal retail chains, and no structured access to credit,’ the report says.
The research team interviewed 36-37 percent of primary households of Africa’s displaced population and validated the findings against UNHCR, World Bank, Oxford University and ILO datasets.
Mr Tito Mbathi, the head of partnerships at Amahoro Coalition, said Africa’s displaced communities are not waiting for rescue but are innovating to overcome financial exclusion.
‘They are running businesses, farming land and moving goods across borders, with almost none of the financial infrastructure available to everyone else. That gap is where the opportunity is,’ Mr Mbathi said.
The report also says Uganda, with more than 1.7 million refugees, hosts more refugees than any other country in Africa, and its land-based self-reliance model has become the continent’s most cited example of what is possible when policy creates the conditions for economic participation.
Data from the United Nations refugee agency (UNHCR) shows that 91 percent of refugees in Uganda live in settlements with allocated farm plots. The report also notes that more than 86,000 refugees were trained in agriculture in 2023 alone, with investments of more than $200 million (Shs727.8 billion) made in refugee-hosting districts since 2017, benefiting both displaced persons and host communities.
‘Uganda demonstrates that the constraint on displaced people’s economic participation is not capacity or willingness, it is access. Where land, credit and market linkages have been unlocked, commercial viability has followed,’ the report says.
The Omia Agribusiness Farmer Hub is among the entities cited in the report. Its model has served 49,000 farmers and channelled more than $413,000 (Shs1.5 billion) directly to refugee and host farmers, operating commercially in corridors previously considered high-risk.
Which sectors are driving the $27 billion income?
Data from the report indicates that of the estimated $27.7 billion (Shs100.8 trillion) annual income generated by Africa’s displaced populations, $22.1 billion (Shs80.4 trillion) comes from internally displaced persons, while refugees contribute $5.6 billion.
The report also indicates a 56 percent labour force participation rate among displaced populations in Uganda, compared to many African national averages. It adds that displaced persons have a 12 percent entrepreneurship rate, higher than many host community averages.
According to the report, there are an estimated 3.4 million displaced-led MSMEs across the continent, and where lending to refugees has been extended, repayment rates have exceeded 95 percent, often outperforming host community microfinance benchmarks.
The report says a $3.2 billion (Shs11.7 trillion) formal financial services opportunity could be realised if displaced populations achieved continental access parity, alongside a $2.4 billion (Shs8.7 trillion) agricultural opportunity if adequate land access were provided. It notes that 88 percent of African countries still lack formal land access frameworks for displaced populations.
Displaced persons are estimated to hold up to $2.7 billion (Shs9.8 trillion) in formal savings, while up to $500 million (Shs1.8 trillion) in formal credit has been advanced to displaced entrepreneurs and households.
The estimated annual manufacturing output generated by displaced labour across Africa stands at $2.8 billion (Shs10.2 trillion).
The report further estimates annual earnings potential of displaced businesses at $4 billion (Shs14.6 trillion), while the potential formal financial services opportunity at continental access parity stands at $3.2 billion (Shs11.7 trillion).
However, the report notes that most refugee economies are not reflected in national statistics despite their significant contribution to revenue generation, adding that much of Africa’s displaced population lives, economically speaking, off the grid.
‘Kyangwali Refugee Settlement is home to 83,558 refugees, more people than Uganda’s internationally known city of Entebbe. Yet Kyangwali is rarely recognised as an economy in national statistics or investment strategies,’ the report says.
‘This invisibility is the product of documentation requirements, regulatory frameworks and financial systems designed for settled populations-systems that exclude displaced people not because of any economic failure on their part, but because they were never designed to include them. These design failures are, for first-mover investors, the opportunity,’ the report adds.
Banks step in
For many years, most banking institutions largely watched as refugees struggled for survival. However, banks are now stepping up after recognising the enormous potential among displaced populations across the continent.
In Uganda, dfcu Bank has partnered with the Amahoro Coalition to translate the report’s findings into concrete financial products and pathways for displaced entrepreneurs across Uganda’s settlement corridors.
Ms Maryann Wanjiku Michuki, the Chief Business Solutions and Marketing Officer at dfcu Bank, said the bank’s 57-branch network and established agribusiness and SME portfolio position it well to serve the displacement economy.
‘At dfcu, we believe financial inclusion must extend to every enterprising community with the ambition and ability to build sustainable livelihoods. This report reinforces what we see across Uganda: displaced people are not only participants in the economy, they are entrepreneurs, farmers, customers and partners in growth. Through our work with Amahoro Coalition, we are committed to supporting practical financial solutions that unlock access to credit, markets and enterprise development for refugees and host communities alike,’ she said.