Kenya at risk of Sh10bn loss from Dadaab shutdown

Kenya could lose up to Sh10 billion in annual foreign currency inflows if the Dadaab refugee camp is closed down in the next three months as directed by the Uhuru Kenyatta government.

Dadaab, which is home to nearly half a million people, has over the 20 years of its existence grown into a well-oiled business hub that takes in large amounts of foreign aid from more than 30 agencies and governments, including the United Nations as well as the United States, Germany and United Kingdom.

The large number of refugees living in the five separate camps that make Dadaab has also created a dynamic economic hub with billions of shillings worth of security, transport, retail, education and engineering services.

The camp has also created more than 10,000 jobs, held mostly by Kenyans.

Concern has been rising that Deputy President William Ruto’s directive that the camp be closed in three months will not only put Kenya at odds with international law but also exact direct economic costs, including the destruction of thousands livelihoods.

“Dadaab is not an ordinary refugee camp but a big business centre that supports varied needs of the thousands of people who live there as refugees, workers or natives,” the Department of Refugee Affairs (DAF) said, adding that Dadaab’s economy is worth billions of shillings.

Kenya reckons that the camp has become a home for the Somalia terrorist group Al-Shabaab’s sleeper cells and, therefore, a big security threat that must be immediately removed.

Top aid agencies operating in Dadaab include the United Nations High Commission for Refugees (UNHCR), the World Food Programme (WFP), the United States Agency for International Development (USAid) and the International Organisation for Migration (IOM).

Others are the Kenya Red Cross, the Norwegian Refugee Council, the International Rescue Committee, Oxfam, Islamic Relief Worldwide and the Catholic Relief Services.

The WFP, which is a UN agency, operates a monthly budget of about Sh1 billion to buy, ship in and distribute more than 10,000 metric tonnes of food to the refugees.

The US government, which is WFP’s main financier, last year spent Sh10 billion on refugee operations in Kenya besides the huge amounts that came from Australia and Denmark in aid, according to DAF.

The UNHCR spends an estimated Sh4 billion on the Dadaab refugee camp every year, highlighting the large amounts of money that will cease flowing into Kenya once the camp is closed.

The UNHCR also supports Kakuma refugee camp situated near the Kenya South Sudan border and which, like Dadaab, is overpopulated with refugees from South Sudan, Burundi, Ethiopia and Congo.

Treasury secretary Henry Rotich has in the past sought to downplay the possible economic costs of closing Dadaab and Kakuma camps terming it “very negligible.”

Via businessdailyafrica

Subscribe To Abacus

Sign up for our FREE Daily Update

Stay on top of the news and up-to-date on with the markets. The Abacus Daily is the best morning briefing for smart, busy people. Our team catches you up with the rest of the world, and prepares you for the day ahead.