Lillian Ochan, a 23-year-old refugee from Ethiopia, buys food items using bamba chakula cash from a shop in Kenya’s Kalobeyei settlement, village 2, in Kakuma on May 21. (World Food Programme/Martin Karimi)
Lillian Ochan, a 23-year-old refugee from Ethiopia, buys food items using bamba chakula cash from a shop in Kenya’s Kalobeyei settlement, village 2, in Kakuma on May 21. (World Food Programme/Martin Karimi)

The Fix

Refuge, Reformed

Kenya has found a way to make refugee camps benefit host communities. Other countries should follow its lead.

Kakuma, a refugee camp in Kenya, is home to less than 1 percent of the world’s displaced people but half of the athletes who competed on the 2016 Refugee Olympic Team. With about 147,000 residents, it has nearly 600 athletic teams—and one of them leads the Kenyan regional second division.

Kakuma is also remarkable in ways that have nothing to do with sports. This year, it was the first refugee camp to host a TEDx. Kakuma contains the world’s first settlement specifically designed to allow refugees and members of the host community to live and work alongside one another. By population, it’s about the 11th-largest city in Kenya, with an economy worth an impressive $56.2 million.

Kakuma is far from perfect, of course, but it does represent an innovative solution to a major global challenge. Around the world today, some 68.5 million people have been displaced from their homes. That’s more than the populations of France (67.4 million), the United Kingdom (65.1 million), and Italy (62.2 million). Many of the displaced remain in their own countries. But about 25.4 million of them are refugees, having fled across an international border. And of that group, around 85 percent have landed in low- and middle-income countries, especially in Africa.

The surge in refugee populations has strained already tight budgets and created resentment among locals. As for refugees themselves, many languish without adequate shelter, food and water, or opportunities for work. But Kakuma has found ways to turn all that on its head, creating sustainable settlements that can empower and employ refugees and benefit their host countries at the same time.

Men preparing to leave for Kakuma, a refugee camp in Kenya, load bags onto a minibus in the South Sudanese capital of Juba on Jan. 17, 2014. (Phil Moore/AFP/Getty Images)

Kenya is not known for its progressive approach to refugees. After a mass influx of Somalis in the early 1990s, it adopted what the researcher James Milner termed an “abdication and containment” policy. Somali migrants needed to be kept in camps, the thinking went, to prevent them from fomenting violence in Kenya’s cities. And those camps should be largely financed and run by international donors, since Kenya had enough of its own problems to worry about.

But things started changing in Turkana County, which is home to Kakuma, after Josphat Nanok became governor in 2013. Having spent time in humanitarian organizations working with the displaced before entering politics, Nanok was familiar with the harm that can come to local economies when refugees go home. The realization hit home when he worked at the World Food Programme in Lokichoggio; he and his colleagues lost their jobs when the Comprehensive Peace Agreement in 2005 meant that Sudanese refugees could repatriate.

Turkana, Nanok believed, was susceptible to a repeat of the same problem. The county is Kenya’s poorest—88 percent of its population lives below the poverty line—and what economy does exist depends on refugees. International aid agencies working there have long employed hundreds of locals, and Turkana traders have relied on the refugees in Kakuma, who mostly hail from South Sudan and Somalia, and are relatively better off, to buy the livestock and firewood they sell.

Nanok realized that Turkana could significantly boost its long-term development by creating settlements that give locals opportunities even after refugees have gone. So, he became an advocate for market-based settlements that, instead of creating indefinite dependency on humanitarian aid, promote autonomy for refugees and opportunity for locals.

In 2015, he got the chance to test his theories when he, along with the U.N. High Commissioner for Refugees (UNHCR) and others, started planning a new settlement in Kakuma to relieve overcrowding in the camp’s other zones. The project, called Kalobeyei, which opened in 2016, was partly funded through a grant of $17.4 million from the European Union, enough to contribute to the settlement’s initial design and outline a strategy for sustainability. It was planned from the start as a market-based settlement in which refugees and members of the host community would live side-by-side, using the same stores, schools, and hospitals.

Shoppers stream through the market in the Kalobeyei settlement in Kenya on March 22, 2017. The market enhances trade and promotes the integration of refugees with the host community in Kakuma, Kenya. (World Food Programme/Martin Karimi)

For the several thousand Kenyans who have relocated to Kalobeyei since it opened two years ago, the new settlement provides clear benefits: Beyond the job opportunities, its health and education facilities are among the best in the county. And for the refugees, the presence of locals means less marginalization. Integrated living lends the camp a feeling of permanence, so often lacking in refugee camps. The ultimate vision is that, once built, the infrastructure will stand the test of time and that the settlement will eventually be more like a city with residents able to pay for and provide services for themselves.

Keeping the camp’s nascent economy growing is Kalobeyei’s voucher currency, called bamba chakula. The phrase means “get your food” in Swahili slang, and indeed cash makes up 95 percent of food assistance in the camp. It is distributed and spent via text message and can only be used in designated shops, including mostly new local and refugee businesses. Bamba chakula aims to ensure that families can access staple foods while still having choices. It is also meant to protect new shops, at least initially, from competition since they will have a built-in customer base.

In most other refugee settlements around the world, residents are offered only in-kind assistance, meaning that they get handouts of whatever food and staples are available. Not only is in-kind assistance usually more expensive to provide since whoever is funding the camp has to purchase, ship, and distribute all goods rather than just hand out digital money, it also robs refugees and locals of potential job opportunities. Refugees who obtain in-kind food aid often sell it for a fraction of what it costs international agencies. In contrast, refugees in Kalobeyei get to choose which food items they want from licensed bamba chakula shops that, in turn, buy their commodities from either Kenyan or refugee wholesalers near Kakuma.

Jacqueline, a Kenyan woman, is among the 57 percent of bamba chakula shop owners who come from the host community. She says that she makes a profit of around $700 (received in the local currency, Kenyan shillings) per month. She employs three refugees and two host community members, and she sells most of the designated bamba chakula items: maize, beans, sugar, rice, and sorghum. She also sells more eclectic goods as well, including pasta and sweets that can be purchased with shillings. “The refugee settlement offered me an opportunity to build my business,” she told me. Without it, she would have struggled to develop such a sizable customer base.

Next door is Adams, a South Sudanese refugee whose monthly revenue is about $20,000, which translates into about $500-$600 a month in profit. He is also a fan of bamba chakula: “For a trader, it is good because it controls how people spend their money.” That is, it limits consumption of unhealthy and expensive goods such as alcohol and enables new traders to get their footing. Eventually, the plan is to abolish bamba chakula, at which point these entrepreneurs will have to start competing with established businesses.

Another major innovation in Kalobeyei’s market-based model is a new cash-for-shelter program. Normally, upon arrival in a camp, refugees are shuffled into preapproved housing for which they do not pay and over which they have no choice. In Kalobeyei, settlement officials have so far given 294 families the chance to be involved in the selection and commissioning of their homes. Once the families picked the designs they liked, elected heads of neighborhood blocs negotiated with eight local suppliers and builders around Kakuma to get the housing built. The builders were paid out of bank accounts the UNHCR set up for each family with about $1,350. The scheme, which will be rolled out more widely, has made housing much more efficient. (A typical emergency tent may cost half as much, but it will only last a year or two.) It has also created work for local business and provided refugees with more say, and access to formal bank accounts with the local Equity Bank.

Although the Kalobeyei experiment is still in its early days, refugees there already earn twice as much as recently arrived refugees in the rest of Kakuma. This success seems to be due largely to bamba chakula, which has injected cash (rather than less fungible in-kind assistance) into the economy. Refugees in Kalobeyei also have more to eat. They can purchase food, of course, but they can also grow it. Kalobeyei’s inhabitants get access to kitchen gardens—small plots of land for personal vegetable patches—which are unusual in refugee camps because camps are typically set up with the idea that the refugees will move on quickly and that dryland farming in arid border locations is not viable.

The market-based model, in other words, seems to be working.

A refugee from South Sudan stands in the door of her new house with her child at the Kalobeyei refugee settlement in Kakuma on Feb. 1. (Tony Karumba/AFP/Getty Images)

Kalobeyei and Kakuma are, of course, works in progress. Many refugees remain extremely poor and struggle to access even basic services like electricity. Although Kakuma’s main market streets are lined with shops, it is worth remembering that only around half of all adult refugees in Kakuma are employed. (The figures vary by camps, with those in the more prosperous Kakuma 1 and 2 nearly six times more likely to be employed than those residing in the newer Kakuma 4, and Kalobeyei’s employment levels appear similar to the average for Kakuma). Still, Kakuma’s overall employment rates compare favorably to those in camps in other countries. Even in Uganda’s thriving Nakivale settlement, fewer refugees are employed or self-employed. And until recently, refugees who found themselves in many of Jordan’s large encampments were not allowed to work at all.

However, another issue is that, in all of Kakuma’s camps and settlements, most employment is still low-paid work with international nongovernmental organizations. The solution is supposed to be entrepreneurship, and the walls of camp’s business center are lined with successes. One is Lucien, a Congolese tailor, who told us that he “has 700 designs in his head.” His bags and shirts are made from ceremonial bitenge cloth, and the price varies from $10 a shirt up to $60 for the same product during TEDx Kakuma.

But Lucien is unusual. Striking out on one’s own requires capital, which is hard to come by. In theory, Equity Bank is willing to offer loans, but most refugees lack the collateral and formal bank accounts required to get them. That is something Kalobeyei’s cash-assistance programs should address over time. For now, though, those who have been able to scale their businesses have tended to rely on remittances sent by relatives in richer countries.

Refugee-led efforts to provide community services face similar challenges. The largest in Kakuma is Resilience Action International, co-founded by two men from the Democratic Republic of the Congo, which aims to provide adult education and reproductive health services and claims to have trained 6,000 people since it opened in 2010. But Resilience Action’s success is an exception. It is the only refugee-driven organization in Kakuma that has managed to acquire a building, gain NGO status, and attract significant external funding. Others face a chicken-and-egg problem: They need sufficient capacity to become viable partners to international NGOs, but they lack adequate support to reach that stage.

And then there’s the issue of formal and informal regulation. Refugees can get passes from the government to move outside of the camps. They can register businesses, and they can apply to work in the camps. But getting all that paperwork sorted entails costs for transportation, fees, and police bribes. More than a quarter of refugees claimed to have had to pay such a bribe during the last month.

That’s something only the Kenyan government can fix. But if given enough time, the new Kalobeyei model may address many of the other challenges. The cash-for-shelter and bamba chakula programs will get more refugees into the formal banking system and, eventually, lead to greater access to credit and finance. A business incubator could help get more start-ups off the ground. And a prospective university campus located between Kakuma and Kalobeyei could provide the training locals and refugees need.

Abebe Chanako, a bamba chakula trader, serves a customer in Kakuma 1 refugee camp in northwestern Kenya on Sept. 25. At right, a detail of the currency in use on May 21. (World Food Programme/Martin Karimi)

Problems aside, something exceptional is happening in Kakuma, specifically in Kalobeyei. Gradually, it is becoming a successful market-based refugee settlement. Sukru Cansizoglu, the head of the UNHCR’s sub-office in Kakuma, is coy about whether the model can be exported: “We look at the problems we have here, and we find solutions to the problems we have here.” But his colleagues are already working to identify best practices that might be adopted elsewhere.

All refugee contexts are different. Kakuma is partly unique because refugees are better off than locals, and so the degree to which they can benefit to the region is clear. Refugees and locals undertake different but complementary economic activities, which has helped mitigate possible tensions and has meant that refugees and the Turkana people have generally positive impressions of each other. Kakuma has also been in existence since 1992, giving it a relatively permanent presence in the region. Meanwhile, Nanok’s political leadership in recognizing the benefits of refugees remains all too rare across refugee-hosting countries.

But some aspects of the market-based approach pioneered in Kalobeyei can certainly be exported elsewhere. Most fundamentally, the model shows a third way between isolated camps and urban settlement. Camps far away from cities risk creating long-term dependency. Large-scale urban integration is usually neither politically nor economically feasible. But with Kalobeyei, integrated settlements can benefit locals even if the refugees go home. Successful replication of the model will depend on identifying and supporting local champions like Nanok, collaborating with development actors, and embracing data in order to learn what works.

More specifically, cash-for-shelter is being rolled out in other contexts: UNHCR is writing a global manual for the idea that is based on the Kalobeyei experience. Meanwhile, bamba chakula is part of a growing recognition that moving from in-kind assistance toward cash assistance can enhance autonomy, dignity, and efficiency, and that such assistance can come in a variety of forms.

Kakuma, and especially Kalobeyei, is like no other refugee camp in the world. It shows that it is possible to integrate newcomers, give them access to real opportunity, and simultaneously help the locals. Its innovative pilot programs, from bamba chakula to cash-for-shelter demonstrate, too, that as the United Nations’ effectiveness has come into question, it has begun identifying new ways to carry out its mission. The next step is to find a way to ensure that Kakuma’s innovation and optimism extends beyond northwestern Kenya.

Alexander Betts is a professor of forced migration and international affairs and senior fellow in politics at Brasenose College at the University of Oxford. @alexander_betts