Uganda’s Refugee Model Turns Displacement into Opportunity, Boosting Jobs, Services and Social Cohesion

“With the right tools, refugees and host communities can build enterprises together,” the World Bank notes, framing Uganda’s model as a blueprint for inclusive development.

In Nkoma, a rural community hosting refugees, students like Jack no longer study under trees or walk long distances for water. Instead, they attend classes in modern school buildings with rainwater systems, a transformation made possible through the World Bank-supported Development Response to Displacement Impacts Project (DRDIP).

“Before, classrooms leaked and we had to fetch water far away. Now we have proper classrooms and water at school,” Jack says—capturing the tangible change underway in Uganda’s refugee-hosting regions.

A Global Model for Refugee Inclusion

Uganda, now hosting around 2 million refugees—the largest population in Africa, has adopted one of the world’s most progressive refugee policies, granting:

• Freedom of movement

• Access to land

• The right to work

While this approach has placed pressure on local services, it has also created an opportunity to turn displacement into shared economic growth.

“With the right tools, refugees and host communities can build enterprises together,” the World Bank notes, framing Uganda’s model as a blueprint for inclusive development.

$200 Million Investment Driving Local Transformation

Launched in 2017 with $200 million in World Bank financing, DRDIP has supported 15 refugee-hosting districts, focusing on:

• Infrastructure development

• Livelihood creation

• Social services expansion

• Environmental restoration

A key feature is its community-driven approach, where refugees and host populations jointly identify priorities and oversee projects—helping build trust and cooperation.

Jobs and Livelihoods at the Core

Beyond infrastructure, DRDIP has significantly boosted incomes and employment:

• Participating households saw income increases of over 17%

• 5,100 hectares of land restored, creating jobs and environmental benefits

• 124,100 people employed through tree-planting initiatives

In Moyo District, Leya, a refugee from South Sudan, used training and a $6,000 grant to start a sewing business. She now owns farmland and supports her five children.

“I can now provide for my family and cultivate my own land,” she said.

Across districts, similar initiatives include:

• Agriculture and livestock cooperatives

• Skills training programmes

• Small business support

• Women-led savings groups and enterprises

Women Driving Economic Change

Women have emerged as a central force in local economic transformation, benefiting from:

• Vocational training

• Access to finance

• Participation in self-help groups and revolving funds

These initiatives have strengthened financial independence and community resilience, particularly among refugee and vulnerable households.

Expanding Schools, Water and Healthcare

Between 2017 and 2024, DRDIP delivered major improvements in shared public services:

• 290 schools built or upgraded, benefiting 490,000 students

  • Primary enrollment increased by 47%

  • Secondary enrollment rose by 9%

• 130 health clinics constructed or rehabilitated, reducing patient wait times

  • Household health costs dropped by 36%

• Expanded access to clean water systems

By improving services for both refugees and host communities, the project has reduced tensions and strengthened social cohesion.

Rapid Response to Population Surges

An innovative Displacement Crisis Response Mechanism allows rapid funding when refugee inflows increase, ensuring:

• Schools, clinics, and water systems expand quickly

• Pressure on local resources is reduced

• Communities avoid competition over scarce services

Sustainable Solutions Through Green Investment

DRDIP has also integrated environmental sustainability:

• Renewable energy systems like the Abuku Solar Water System

• Community woodlots for sustainable fuel and construction

• Land restoration projects supporting climate resilience

These initiatives address both environmental degradation and livelihood needs.

Scaling Up: $328 Million Phase II

Building on its success, DRDIP Phase II is launching with an additional $328 million in World Bank financing, aiming to support:

• 3 million people, including 1 million refugees

• Creation of 60,000 new or improved jobs

• Generation of 6.1 million workdays through public works

The next phase will deepen investments in:

• Infrastructure and public services

• Economic opportunities and enterprise development

• Environmental management

A Blueprint for the Future

“Uganda has long championed progressive approaches that welcome refugees and invest in both them and host communities,” said World Bank Country Manager Francisca Akala.

The country’s experience demonstrates that with inclusive policies, targeted investments, and community participation, refugee-hosting regions can:

• Strengthen local economies

• Improve service delivery

• Build social stability

• Drive long-term development

From Crisis to Opportunity

Uganda’s model is increasingly seen as a global example of how displacement can be transformed into shared prosperity—not just managed as a humanitarian crisis.

By integrating refugees into national systems and investing in host communities, the country is showing that economic inclusion, not exclusion, is the key to sustainable solutions.