Horn of Africa: IFC - Private sector solutions for regufees and host communities
The Horn of Africa is fraught by political and economic fragilities and conflicts, leading to protracted displacement situations. They involve confinement in camps with few opportunities to establish sustainable livelihoods. Switzerland contributes to durable solutions for displacement-affected communities by promoting private sector development, leading to greater economic and employment opportunities and socio-economic integration in the region, which is in the Swiss interest.
Horn of Africa
Employment & economic development
Forced displacement (refugees, IDP, human trafficking)
Business support & economic inclusion
- World Bank - International Finance Corporation
The Horn of Africa (HoA) is marked by complex and dynamic mixed migration movements. Ethiopia and Kenya are the second and fourth largest refugee hosting country in the world. The protracted nature of displacement in the Horn of Africa calls for innovative solutions, including a possible larger role to be played by the private sector in supporting refugees’ self-reliance and supporting host communities.
To be co-financed by both Swiss Humanitarian Aid and South cooperation budgets, the planned intervention will utilize a regional approach and aims to align Swiss interests linking Migration and international cooperation within durable solutions and protection sub themes.
A study conducted by the World Bank in 2016 showed that harnessing the productive potential of refugees and supporting their self-reliance could lead to economic gains for both refugee and host populations. To explore what can be done from the private sector perspective, International Finance Corporation (IFC) - based on its experience with Syrian refugees in Jordan and Lebanon - conducted in 2017 a consumer and market study in Kakuma camp and town. The data collected showed that Kakuma town and camp constitute a market of significant size. The study provided evidence and suggested entry points for market-led solutions in Kakuma and Kalobeyei in Kenya. Based on this study, IFC decided to attract new private sector players to Kakuma. Together with the Africa Enterprise Challenge Fund (AECF), it plans to launch early 2019 a competition to attract innovative business models from firms that seek to engage in Kakuma. An award of USD 25 million will be distributed through grants and soft loans for seed capital to support the development and roll-out of these models to serve both refugee and host communities, enabling better access to key goods and services. The competition will have three windows for: a) private sector companies/corporates, b) social entrepreneurs and c) local entrepreneurs (host community and refugees).The intervention logic of this action is that by attracting private sector and social enterprise investment to the Kakuma and Kalobeyei area and supporting local entrepreneurial potential, there will be better employment opportunities for refugees and the host community, improved services, more consumption choices and potentially reduced prices. After support to the first phase in Kenya (2019-2022), the project will explore potential duplication in the region, which will be supported in the second (2023-2026) and third phase (2027-2031). The overall objective of the Swiss engagement in this EP is to address socio-economic challenges of refugees in HoA region through supporting interventions that address longer term enhanced self-esteem, self/employment and income opportunities. In summary, the Swiss added value will be to provide financial, operational and technical support in view of its past experiences on private sector, income, employment and provision of vocational skills especially with displaced affected communities. The programme is highly relevant for Switzerland and Swiss interests as it supports socio-economic integration of displaced people in the region and hence offers them the perspective of (re)integration and self-reliance rather than opting for irregular migration.
|Directorate/federal office responsible||
International Financial Institution (IFI)
|Budget||Current phase Swiss budget CHF 10'000'000 Swiss disbursement to date CHF 0|