Urban refugee economies: Addis Ababa, Ethiopia – Working Paper March 2018 – Ethiopia

Alison Brown, Peter Mackie, Kate Dickenson, Tegegne Gebre-​Egziabher

Summary

With a focus on the informal economy, this research provides new insights into urban refugee economies and their contribution to market development in Addis Ababa – a city where refugees are, at least for the time being, not legally permitted to work. Refugee economies are defined here as the economy created by urban refugees through their livelihood activities, enterprise, need for services and consumption, and through refugee support and diaspora inputs. While academics and humanitarian agencies have focused on the role of informal livelihoods in supporting the survival of refugee households, the coalescence of refugee livelihoods into ‘refugee economies’ – and the links with, and contributions to, host economies – has not been widely researched. This research addresses this knowledge gap.

Over 60 per cent of the world’s refugees live in urban environments and while cities provide anonymity and access to urban resources, refugees often face exploitation and discrimination in urban policy. Although humanitarian agencies advocate for the right of refugees to live and work in cities, host governments often restrict their rights to work, forcing urban refugees into precarious and often informal economy livelihoods. Furthermore, current humanitarian interventions designed to support refugees in overcoming challenges to sustainable livelihoods in cities are insufficient. This undermines the resilience of refugee households, limits their prospects to claim ‘decent work’ and ignores the potential of refugees to contribute to the host city.

Through a case study of Addis Ababa, this research develops knowledge on refugee economies, identifies contributions that refugees make to the local economy despite the significant challenges they face, and investigates the potential asset of refugee economies to inform humanitarian assistance in areas where refugee rights to work are restricted. While Ethiopia has one of the largest refugee populations in sub-Saharan Africa (over 794,130 in 2016), refugees are not legally permitted to work (UNHCR 2017b). However, Ethiopia is now a pilot country for the implementation of the United Nations High Commissioner for Refugees (UNHCR) Comprehensive Refugee Response Framework (CRRF) and the Ethiopian government is re-examining refugee employment rights.

Research in Addis Ababa was undertaken in April 2017 and addressed four research questions:

• What livelihood strategies do different refugee communities in Addis Ababa adopt?

• How do refugee economies link with local economies in Addis Ababa and what are the wider market impacts and contributions?

• What humanitarian interventions would help secure refugee economies and increase the linkages with local market actors in the absence of a right to work?

• What are the key challenges and opportunities in the transition towards a right to work for urban refugees in Addis Ababa?

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The research drew on 195 key informant (KI) interviews with owners of, and workers in, Ethiopian-owned businesses (144) and refugee-owned businesses (51); focus groups with male and female refugees from Somalia, South Sudan, Eritrea, Yemen and the Great Lakes region; key informant interviews; and a workshop with stakeholders in the city. A literature review also examined the existing state of knowledge.

Key findings

Urban refugees in Addis Ababa

There are an estimated 31,000 refugees in Addis Ababa consisting of around 20,000 registered refugees, including assisted refugees and Eritrean unassisted refugees (Eritrean unassisted refugees are also known as Out of Camp Policy refugees or OCPs), and perhaps 11,000 unassisted unregistered refugees (KI interview). These refugees represent 21 nationalities and have differing levels of health, education and experience of the urban environment. They have also integrated differently into the host city with assimilation dependent on factors including knowledge of Amharic, social networks, wealth, cultural affiliation, physical traits, length of time in country of origin, inter-marriage with Ethiopians, religion and employment. This heterogeneity must be taken into account in responses to the challenges and opportunities of urban refugee economies, meaning there can be no one-size-fitsall response.

Urban refugees and their livelihood strategies

Though refugees in Addis Ababa have no right to work, informal work is generally tolerated, and the research identified four main income sources:

• Informal employment was widespread with Eritrean, Somali and Yemeni refugees employed in Ethiopianowned and refugee-owned informal enterprises. Refugees were also employed informally by formal organisations, eg as nurses in private clinics or translators.

• Refugees ran informal enterprises in service provision, retail trade, leisure and hospitality, and construction. Some enterprises were run under the licence of an Ethiopian. Refugee-owned enterprises varied in size and productivity.

• Humanitarian assistance varied in form and in distributing organisations. All non-OCP registered urban refugees receive financial assistance from UNHCR (distributed monthly). Various non-governmental organisations (NGOs) also support urban refugees through business grants and loans, and skills and business training programmes.

• Remittances were highlighted as a vital income source for urban refugees. However, access varied across and within different nationalities.

Though informal work is generally tolerated, refugees face considerable livelihood challenges:

• Limited access to employment is the most significant barrier to securing refugee livelihoods.

• Refugees and Ethiopians both considered that the OCP policy should extend beyond Eritreans to include other nationalities.

• With no labour protections, refugees face workplace discrimination that includes low wages or summary dismissal.

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• Lack of access to business licences means most refugee-run businesses operate under the licence of an Ethiopian business, limiting reinvestment and growth potential.

• Many refugees identified the lack of Ethiopian language skills as a barrier to employment and wider assimilation.

• Women refugees face particular challenges in managing childcare and income earning, and need additional support.

• Vulnerable refugees may be forced into undesirable work such as prostitution and NGO help for these groups is imperative.

• Despite extensive government and NGO engagement, many urban refugees are isolated and strengthening representation is key.

Linkages, impacts and contributions of refugee economies

Impacts of refugee economies include:

• Business agglomerations are formed and create dynamic new markets.

• Refugees enhance existing enterprises by creating links with host community enterprises and creating new customer and supplies bases.

• Reciprocal employment was common, as both local and refugee businesses sought to reach customers in their respective communities.

• Innovation is evident in refugee businesses creating new markets, the most notable being the import of perfume by Somali refugees.

• Diaspora links can be key in generating new enterprise and internationalising the local economy.

Interventions to secure refugee economies in the absence of a right to work*

The research points towards eight interventions to help secure refugee economies in Ethiopia’s current context where there is no de jure right to work:

• Advocacy,

• Enabling self-help by creating a conducive environment for work,

• Addressing labour protection gaps,

• Strengthening representation,

• Appropriate business and skills training,

• Targeting illicit economies,

• Inclusion in local economic development (LED) policy, and

• Consumer protections.

Challenges and opportunities in the transition towards a right to work

With the transition from de facto to de jure rights to work imminent for at least some refugees in Ethiopia, the study identifies seven key challenges and opportunities associated with the transition:

• Bureaucracy related to gaining work permits,

• The need to access business licences,

• Employment protections,

• A joint stakeholder platform,

• Anticipating and managing growth,

• Maintaining a safety net, and

• Wider issues of integration.

Conclusion

Refugees in Addis Ababa face considerable economic difficulties and pose many challenges for urban and national authorities. Yet refugee economies are also highly integrated into the city’s economy and make significant contributions. The research points to opportunities for humanitarian sector actors to enhance refugee economies today, and in the future when Ethiopia implements its pledge to enhance access to employment for refugees.

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