Africa: Jobs for Refugees and Host Communities Improve Services, Promote Self-Reliance – Sabula

Africa: Jobs for Refugees and Host Communities Improve Services, Promote Self-Reliance – Sabula

Victoria Sabula, the Africa Enterprise Challenge Fund CEO, spoke with Njiraini Muchira on supporting economic activities to empower migrants living in camps

What is the Africa Enterprise Challenge Fund all about?

It is a development finance organisation that supports businesses to innovate, create jobs and leverage investments to create resilience and sustainable incomes in rural and marginalised communities in Africa. AECF focuses on agribusiness, renewable energy and climate technologies, while also addressing themes of gender, youth and fragile contexts. In just over a decade, AECF has impacted more than 27.7 million lives, created 24,000 jobs and leveraged over $740 million in matching funds.

Why focus on agriculture and agribusiness, renewable energy and rural financial services?

By providing seed capital for such companies with strong potential for growth, the fund helps to de-risk the business concept, attract commercial funders and put the company on a sustainable growth trajectory. This is good for the local communities who increase their access to basic services, have greater choice and more affordable products and access to new jobs and livelihoods.

AECF and partners have launched a challenge fund targeting refugees. What informed this?

The Kakuma and Kalobeyei Challenge Fund is designed to support investment, development and job creation in northern Kenya’s refugee hosting areas. The aim of the fund, funded by the International Finance Corporation (IFC), is to bring innovative programmes to bring new opportunities to refugees in Kakuma. AECF supports businesses in places seen as risky for commercial investors.

The fund was to be launched in 2018. Why the two-year delay?

IFC launched Kakuma as a Marketplace Report in May 2018. A programme of such magnitude and ambition that required careful research and preparation, selection of implementing partner, signing of legal agreements, developing relevant administration agreements and operational protocols.

What challenges face refugee camps and how can these be addressed?

They are mainly access to capital, clean energy, water, sanitation and childcare services. AECF specialises in incentivising the private sector to address challenges of communities living in hard to reach places or in fragile settings.

How has Covid-19 affected refugees?

In Turkana, half of the 2,400 businesses have been forced to close operations due to Covid-19. For those still in operation, sales have decreased across all sectors with businesses reporting a decrease of 30 percent to 50 per cent. In Turkana West, where Kakuma camp is located, businesses are experiencing cases of inability of customers to pay. Such deterioration has led to job losses. The fund is important in assisting reviving economic activity in the county.

How much does the fund intend to mobilise and what should be the impact on refugees in the camps?

Funding available to businesses is $12.7 million to support increased economic activity in Kakuma and Kalobeyei to boost inclusion of refugees and host communities, incomes and create jobs and facilitate economic development. The programme will also ensure women and youth gain equal opportunity for jobs and business support.

IFC estimates that refugees in Kakuma spend $56.2 million annually on goods and services. What does this say about the economic potential of the camp?

Kakuma hosts 300,000 people with a vibrant but mostly informal private sector. Many services are not available, providing an opportunity for privateers and social enterprises to bring solutions and increase consumer choices.

Why is it important for the private sector to work with refugees?

They have potential to expand job opportunities for refugees and the host communities, improve services, provide more choice, reduce prices and contribute to self-reliance. They would also enhance socio-economic integration of refugees with host communities, while contributing to development of the hosting region, in the spirit of the global agenda of the Comprehensive Refugee Response Framework and, more widely, of “leaving no-one behind.”

Does it make economic sense for private businesses like banks, supermarkets to open branches here?

Equity Bank opened its first branch in Kakuma in 2014 and plans a second one in Kalobeyei. The second is KCB. Kakuma’s daily economic activity indicate that the camp and town present a significant market. Kakuma as a Marketplace Report showed there is capacity for two medium-sized supermarkets in the area. Notably, 46 percent of spending by residents in the town and the camp goes towards consumer goods.