This report presents findings from a market system analysis conducted in the Dadaab refugee camps in Garissa County in northeastern Kenya. The analysis is based on research conducted by Samuel Hall in and around Dadaab in October and November 2018, including key informant interviews, focus group discussions, a survey of market prices, and a household waste survey. The research included: (a) a socio-economic assessment and context analysis that describe specific challenges and opportunities in Dadaab; and (b) a rapid value chain analysis to identify value chains with the potential for inclusive growth.
Key findings of the socio-economic assessment and context analysis include:
- The Dadaab refugee camps host over 200,000 registered refugees, the majority in protracted displacement, and approximately 12,000 undocumented new arrivals. Most refugees are Somali (96 percent). The host population in Dadaab sub-county is estimated to be around 233,000 (2020 projection based on 2009 census).
- Access to infrastructure in Dadaab (e.g. latrines, solarized boreholes) is reportedly better than elsewhere in Garissa County. Most services in Dadaab are available to both refugees and host communities.
- Refugee repatriation, reductions in food aid, and cuts in humanitarian agency budgets have had a negative effect on the local economy in Dadaab, impacting both refugees and host communities.
- Each of the Dadaab camps has its own market and market characteristics. Together these form a ‘vibrant and diverse’ market where host community members and refugees buy and sell a range of goods and services.
- Refugees and hosts have regular social and economic interactions. Refugees and hosts share a common language, religion, and culture, and there is a sense of kinship and homogeneity between the two groups. Market exchanges between refugees and hosts are common. Some refugees are informally employed by hosts to look after livestock, and host community members own businesses in the camps. The environmental impact of refugees around Dadaab (due to collection of firewood and grazing of animals) is the only significant source of tension between the two communities.
- There are several factors limiting refugee self-reliance in Dadaab, including: (a) movement restrictions, which are a source of frustration for refugee entrepreneurs (e.g. business owners must pay intermediaries to obtain goods, which adds costs, and makes it difficult to ensure quality and safe movement of goods); (b) the negative security narrative surrounding Dadaab, which discourages some private and national actors from investing in the area; and (c) restrictions on land access that limit agricultural activities.
- Despite these constraints, refugees have managed to establish livelihoods in diverse sub-sectors. Some Somali refugees have begun to embrace small-scale agricultural production, and to reap benefits from it.
- There are opportunities to build on existing growth, development, and value chains in Dadaab. The Comprehensive Refugee Response Framework (CRRF) and Global Compact on Refugees (GCR) have the potential to provide stronger socio-economic inclusion and integrated livelihood options for both refugees and host communities in Dadaab. Moreover, the county government recognizes the economic benefits of the refugee presence.
The rapid value chain analysis identified four primary value chains in Dadaab: (1) waste management and recycling; (2) livestock, including small (sheep and goats) and large ruminant fattening and trade; (3) commodity trade and services; and (4) vegetable and fruit production. Drawing on the expertise of key informants, the value chains were rated according to a series of indicators, resulting in the selection of two sub-sectors for further exploration. These are:
- Vegetable and fruit production: There is substantial demand for fresh fruits and vegetables in Dadaab and in response to this demand, refugees and hosts have begun to grow high-demand produce. Local produce production would eliminate transportation costs, which currently account for a significant portion of produce prices in Dadaab markets. This sub-sector has strong potential for job creation across all demographic segments. Moreover, Dadaab has ample arable land and water, and there is buy-in from local authorities. Enhancing this value chain would require linking refugee and host communities to agricultural capacity-building programs as well as to micro-finance providers that can provide access to capital. There are also socio-cultural dimensions to consider (e.g. stigmatization of agricultural activities among Somali pastoralist clans), as well as regulatory aspects (e.g. restrictions on access to land).
- Waste management and recycling: Improvements in waste management would have a positive impact on health and the environment in Dadaab. The research confirmed strong demand from households for waste collection services as well as buy-in from local authorities. Private sector actors in Nairobi have expressed interest in purchasing waste from Dadaab (in particular scrap metal and plastic). A key issue is how to develop market linkages that overcome the high transport costs between Dadaab and Nairobi.
The authors conclude that, while some gaps remain, essential requirements for market systems in Dadaab are present: access to roads and infrastructure can be facilitated, water and land are available to support value chain development, and host-refugee socio-economic interactions are already well established.