Uganda has long occupied a singular place in the global refugee debate, as a lower-income country that grants refugees the right to work, move freely, and access public services in a region where most governments do the opposite.
That model is now facing its most serious stress test in a generation.
Uganda was hosting 2,011,234 refugees and asylum-seekers as of April 30, 2026, according to data from the government’s Office of the Prime Minister and the Office of the United Nations High Commissioner for Refugees (UNHCR), a milestone that cements the country’s position as Africa’s largest refugee host.
The population reflects worsening crises on multiple fronts: refugees come primarily from the Democratic Republic of the Congo, which accounts for 52.5 percent of the total, followed by South Sudan at 32.8 percent, with Sudan, Eritrea, Somalia, Burundi, Rwanda and Ethiopia making up most of the remainder.
The numbers alone would be manageable if the money followed. It has not. By the end of 2025, Uganda’s refugee response was only roughly 25 percent funded.
The International Rescue Committee (IRC) warned in January that with just 6 percent of required funding secured for 2026, nearly 2 million refugees risk losing access to basic health and nutrition services, driving further clinic closures and preventable illness and deaths.
Funding cuts have already forced the IRC to shutter health services across 11 refugee settlements. UNHCR itself indicated a shortfall of approximately pound 6.5 million, affecting over 90 percent of its health funding budget in the country.
The UNHCR estimates that it costs roughly $16 per refugee per month to provide essential services. Without additional funding, the agency can deliver only $5 worth of aid per month per person.
The urban escape valve
As settlement conditions deteriorate, refugees are voting with their feet, moving to cities. While 91 percent of refugees officially live in settlements, a massive and largely invisible migration is reshaping Kampala, as thousands trade dwindling rations for the grit and opportunity of the capital.
With 2026 funding cuts slashing settlement rations to near-zero, this migration has become a survival strategy, a shift away from aid dependency and toward active economic participation.
Urban life offers no guaranteed soft landing. In Kampala, refugees enter the same informal economy as Ugandans, paying rent, competing for customers, borrowing from social networks and absorbing household shocks without safety nets.
The right to work exists on paper; income depends on capital, documentation, market access, and employer trust. For most new urban arrivals, the gap between those two things is wide.
Evidence on what actually closes that gap is beginning to emerge. The IRC’s Re:BUiLD program, backed by the IKEA Foundation, ran a rigorous randomised controlled trial among urban refugees and Ugandan host residents in Kampala.
The trial involved 2,000 inexperienced and prospective entrepreneurs aged 18 to 45, alongside 600 experienced entrepreneurs who served as mentors. Participants assigned to the cash-grant group received $540.
The findings showed that cash grants had large and persistent positive effects on economic outcomes: monthly profits increased by approximately $23 on average, and participants improved household well-being across food security, assets and savings.
Mentorship, however, proved more complicated. While adding mentorship to cash support did not improve business outcomes on average, qualitative evidence revealed that mentorship experiences varied widely in quality.
Some participants benefited from advice, motivation and connections, while others faced poor mentor commitment, mismatched skills and weak communication.
Women, particularly those paired with female mentors, fared worse, a gap the researchers attributed to heavier household responsibilities and fewer business opportunities rather than any failure of intent.
The self-reliance push
The evidence base is now informing a wider policy shift, from aid delivery toward economic graduation.
Two initiatives- Sustainable Market Inclusive Livelihood Pathways to Self-Reliance (SMILES) and GER- are moving over 14,000 vulnerable refugee households toward economic independence through integrated poverty graduation and market development strategies.
A recent Learning Summit highlighted an 89.4 percent graduation rate amid declining humanitarian aid.
The SMILES project, funded by the IKEA Foundation and running through 2027, focuses on Kyaka II and Kyangwali settlements.
At the national level, the World Bank’s Development Response to Displacement Impacts Project is scaling further.
Phase I created jobs for more than 174,660 people, including 27,380 refugees. Phase II is designed to create at least 60,000 new jobs and improve access to basic social and economic services for 3 million more people, including 1 million refugees, with a project value of $328 million.
But structural barriers persist. Re:BUiLD’s Securing Documentation Campaign found that refugees in Uganda continue to face obstacles linked to documentation, urban registration, language, service centralisation, high travel costs, banking access, NSSF registration, and recognition of qualifications.
Economists at Uganda’s Economic Policy Research Centre argue the government must shift from a purely humanitarian response to a developmental approach, embedding refugee economic integration within national planning frameworks and working with commercial banks and fintechs to roll out digital ID-linked microcredit services.
A model under pressure
Uganda’s open-door policy has earned it international admiration and, for years, international funding. The two are now decoupling.
As the government begins to restrict refugee status for certain nationalities in response to funding deficits, observers warn the focus must shift to urgent reforms, increased accountability and sustainable local financing to prevent a total collapse of the refugee response system.
One fellow at Refugees International, himself a refugee living in Uganda, has argued that as global humanitarian aid decreases, the best refugee policy is no longer to keep assisting but to provide genuine access to work, a win-win for refugees and their Ugandan-born neighbours.
The Kampala trial data suggests that is achievable, at least in part. A $540 cash grant, deployed to a refugee entrepreneur with no business experience, produced measurable and lasting gains.
The policy question Uganda now faces is whether that kind of practical economic support, involving capital, documentation, and financial products, can be delivered at two-million-person scale, without the international funding that made the model famous.
So far, the world has not provided an answer. Uganda is left to improvise one.