Kenya’s Refugee Integration Plan Faces Growing Risk as Aid Cuts Deepen Poverty, New Study Warns

The report paints a troubling picture of deteriorating livelihoods, collapsing refugee employment, rising poverty, worsening food insecurity, and mounting stress in some of Kenya’s most vulnerable regions.

Kenya is approaching a critical turning point in its response to forced displacement as the country shifts away from a traditional encampment model toward integrated refugee settlements under the government's ambitious Shirika Plan. However, a new study warns that without urgent job creation and economic opportunities, shrinking humanitarian aid risks pushing both refugees and host communities deeper into poverty rather than toward self-reliance.

The findings come from a joint study conducted by the World Bank, UNHCR, and the Center for Effective Global Action, which tracked refugee and host households between 2022 and 2024 to assess how communities are coping amid worsening economic pressures, declining aid, and climate-related shocks.

The report paints a troubling picture of deteriorating livelihoods, collapsing refugee employment, rising poverty, worsening food insecurity, and mounting stress in some of Kenya's most vulnerable regions.

Kenya Hosts Nearly 850,000 Refugees

As of April 2026, Kenya hosted approximately 847,780 refugees and asylum seekers, most of whom live in areas already struggling with:

• Weak labor markets

• Poor infrastructure

• Limited public services

• Climate-related vulnerability

• Chronic underdevelopment

The majority of refugees are concentrated in:

• Kakuma

• Kalobeyei

• Dadaab

• Urban settlements

These regions, particularly Turkana and Garissa counties, have long faced economic hardship even before the arrival of large refugee populations.

The report warns that shrinking global humanitarian budgets are now intensifying competition between refugees and host communities for:

• Jobs

• Food

• Water

• Healthcare

• Education

• Infrastructure services

Poverty Remains Deep and Widespread

The study found that poverty levels remain extremely high among both refugee and host populations, with little sign of improvement over recent years.

More than four out of five refugees in Kakuma, Kalobeyei, and Dadaab were found to be multidimensionally poor, facing overlapping deprivation in areas such as:

• Employment

• Education

• Housing

• Nutrition

• Water access

Host communities in nearby regions also continue experiencing severe hardship due to longstanding development gaps.

Researchers warned that conditions today may actually be worse than reflected in the surveys because the data was collected before the deepest humanitarian aid cuts observed after late 2024.

Aid Cuts Severely Impacting Refugee Economies

One of the report's most significant findings is the dramatic reduction in humanitarian aid available to refugee households.

Between survey periods:

• Aid distributions fell sharply

• Food ration cuts increased

• Voucher systems were suspended

In 2024, aid still accounted for approximately three-quarters of total household income for camp-based refugees.

As aid declined, refugee household incomes dropped significantly, triggering broader economic effects across local camp economies.

The report found that reduced refugee spending also harmed host communities that depend on camp-related:

• Trade

• Casual labor

• Services

• Informal businesses

Kalobeyei experienced especially sharp increases in monetary poverty during the study period.

Refugee Employment Collapsing

The study identified jobs and economic opportunity as the "missing link" in Kenya's refugee integration strategy.

Refugee employment rates deteriorated dramatically between survey waves:

• Employment in camps fell from 13 percent to 7 percent

• Urban refugee employment dropped from 50 percent to 37 percent

At the same time, inactivity among camp-based refugees rose to 89 percent.

Researchers emphasized that this was not due to unwillingness to work but rather to the lack of available jobs.

Approximately 64 percent of refugees cited lack of employment opportunities as the main reason for unemployment, compared to 41 percent previously.

Host communities also faced weak labor markets:

• Employment in camp-adjacent areas declined slightly from 35 percent to 33 percent

• Inactivity rose to 63 percent

The report concluded that local economies currently lack sufficient capacity to absorb growing labor demand from both refugees and local residents.

Work Permit Restrictions Continue to Limit Opportunities

The study also highlighted major structural barriers preventing refugees from accessing formal employment.

In the first survey wave:

• Less than 1 percent of refugees possessed work permits

Administrative hurdles, mobility restrictions, and legal limitations continue to constrain labor market participation and economic inclusion.

The Shirika Plan aims to promote refugee integration into national systems, but researchers warned that implementation gaps — especially regarding:

• Work authorization

• Freedom of movement

• Market access

still significantly limit opportunities for self-reliance.

Women Face Additional Economic Barriers

Women were found to face particularly severe constraints in accessing employment opportunities.

Low female labor participation among refugee women is linked to:

• Caregiving responsibilities

• Restricted mobility

• Safety concerns

• Limited job availability

Women in host communities face similar challenges, particularly in underdeveloped regions such as Turkana and Garissa.

The report warns that without targeted investment in:

• Childcare

• Skills training

• Safe workplaces

• Economic inclusion programmes

women risk being excluded from the benefits of integration efforts.

Climate Shocks Increasing Vulnerability

Climate-related shocks are further worsening conditions for both refugees and host communities.

The report noted that:

• Food prices remain persistently high

• Flooding and excessive rainfall in 2024 damaged infrastructure and livelihoods

• Agricultural and livestock-dependent communities suffered major losses

Host communities reliant on farming and pastoral livelihoods were especially affected by weather disruptions.

Climate vulnerability is increasingly compounding economic hardship in refugee-hosting regions already struggling with poverty and limited infrastructure.

Families Resorting to Harmful Coping Strategies

As conditions worsen, households are increasingly adopting negative coping strategies to survive.

Among camp-based households:

• 64 percent reported reducing food consumption

• 44 percent relied on credit to purchase food

These figures indicate rapidly eroding resilience and growing food insecurity.

Children are among the hardest hit.

The study found evidence of worsening nutrition outcomes and prolonged nutritional stress rather than short-term food shortages alone.

Researchers warned that gaps in nutrition service coverage are further increasing risks for vulnerable children.

Mental Health Pressures Rising

The report also identified growing mental health challenges among refugees and host populations.

Increasing levels of:

• Stress

• Anxiety

• Psychological distress

are affecting households' ability to cope with shocks and invest in future livelihoods.

Humanitarian experts warn that prolonged economic insecurity and uncertainty can create long-term psychological and social consequences, particularly for displaced populations living in unstable conditions for many years.

Shirika Plan Seen as Historic Opportunity

Despite the challenges, the study describes Kenya's Shirika Plan as a potentially transformative policy shift.

The plan seeks to replace long-term refugee camps with integrated settlements that allow refugees greater inclusion in national systems and local economies.

Supporters believe the strategy could:

• Improve social cohesion

• Reduce aid dependency

• Expand economic participation

• Strengthen local development

However, the report stresses that integration alone will not succeed without substantial economic opportunity.

Jobs Seen as Essential for Self-Reliance

The central conclusion of the study is that integration without employment opportunities will fail to achieve meaningful self-reliance.

Researchers argue that successful implementation of the Shirika Plan will require:

• Lowering barriers to work

• Expanding labor market access

• Encouraging private investment

• Strengthening local economies

• Maintaining targeted humanitarian support during transition

Without these measures, refugees and host communities may continue facing deep vulnerability despite living in more integrated environments.

Kenya's Approach Could Shape Global Refugee Policy

Kenya's refugee integration efforts are being closely watched internationally as many countries seek alternatives to long-term encampment models.

Development agencies increasingly argue that refugee responses should focus not only on humanitarian assistance but also on:

• Economic inclusion

• Development investment

• Local integration

• Shared prosperity

If successful, the Shirika Plan could become a model for balancing refugee protection with local economic development.

But the report warns that without urgent action to create jobs and sustain vulnerable communities during the transition, integration risks becoming symbolic rather than transformative.