Kenya: As Aid Shrinks, Jobs Become Central to Self-reliance for Host Communities and Refugees

Kenya is entering a decisive moment in its response to forced displacement.

As the country shifts from an encampment-based model toward integrated settlements under the Shirika Plan, new evidence points to a central risk: without jobs, the current drop in aid is translating into deeper poverty rather than self‑reliance for both host communities and refugees.

A recent study produced through a collaboration between the World Bank, UNHCR, and the Center for Effective Global Action draws on two waves of a panel survey conducted between 2022 and 2024.

By following the same refugee and host households over time, the study provides rare insight into how welfare and coping strategies are evolving as humanitarian aid tightens, shocks intensify, and local economies come under strain.

• In Kenya, poverty and joblessness remain entrenched among host communities and refugees, especially in camps, while humanitarian assistance has declined.
• Jobs are disappearing in labor markets shared by host communities and refugees: refugee employment has collapsed, while host communities face persistently weak job prospects.
• The Shirika Plan is a historic opportunity, but self reliance will remain out of reach without jobs. Success hinges on enabling work through enhanced mobility, private investment, and targeted, shock responsive support.

Why this evidence matters now

As of April 2026, Kenya was host to 847,780 refugees and asylum seekers, mostly in areas with the weakest labor markets, limited infrastructure, and high exposure to climate shocks.

As global aid budgets shrink, refugees and host communities are increasingly competing in the same thin markets and relying on the same under‑resourced schools, clinics, roads, and water systems, raising the stakes for local livelihoods.

Forced displacement is both a humanitarian issue and, increasingly, a challenge for jobs and development, with direct implications for poverty reduction, local economic stability, and social cohesion.

Because the surveys predate the deepest aid cuts observed since late 2024, conditions today are likely even more severe.

Poverty remains widespread

Poverty and deprivation remain widespread among both host communities and refugees, with little improvement over time.

More than four out of five refugees in Kakuma, Kalobeyei, and Dadaab are multidimensionally poor, experiencing overlapping deprivations in education, employment, housing, water, and nutrition.

Host communities, particularly in Turkana, face similar hardship, reflecting longstanding development gaps.

Between survey waves, the median value of aid received by refugee households fell following repeated ration cuts and the suspension of voucher systems.

Because aid still accounted for about three quarters of total revenue for camp‑based refugees in 2024, these cuts translated directly into falling household incomes and weaker demand in local camp economies, squeezing host community livelihoods tied to trade, services, and casual work.

This is most evident in Kalobeyei, where monetary poverty rose markedly between survey waves.

Jobs: the missing link to economic inclusion

Refugee labor markets deteriorated sharply amid already weak host employment conditions.

Refugee employment halved between survey waves, falling from 13 percent to 7 percent in camps and from 50 percent to 37 percent in urban areas.

Inactivity among camp‑based refugees rose to 89 percent, reflecting limited job opportunities rather than unwillingness to work, with 64 percent citing a lack of available jobs, up from 41 percent.

Host employment changed little but remained low, especially in camp‑adjacent areas where employment edged down from 35 percent to 33 percent and inactivity rose to 63 percent.

Overall, the results point to a sharp refugee labor market shock alongside limited absorptive capacity in host labor markets.

Structural barriers further constrain access to work.

In the first wave of the survey, less than 1 percent of refugees held a work permit, underscoring how administrative hurdles and mobility restrictions continue to constrain formal labor‑market entry.

Host communities face a parallel challenge: chronically weak labor demand in Turkana and Garissa, compounded by shrinking aid that further contracts service‑oriented camp economies.

Women face the compounded constraints. Low female labor participation in camps reflects the intersection of care responsibilities, limited mobility, and weak job availability; host‑community women in lagging regions face similar barriers. Without deliberate investments in childcare, skills, and safe work opportunities, women risk exclusion from the gains of integration.

Shocks and negative coping are eroding resilience

Food prices also remain a persistent stressor, while excessive rainfall and flooding in 2024 disrupted livelihoods and damaged infrastructure, particularly affecting host communities reliant on agriculture and livestock.

As incomes fall and food becomes less affordable, households increasingly resort to negative coping strategies, signaling eroding resilience.

In camp settings, 64 percent of households reported reducing food consumption and 44 percent relied on credit to buy food.

Children are bearing the brunt: complementary evidence points to worsening nutrition outcomes, and suggest sustained nutritional stress rather than short‑term shocks alone.

Gaps in nutrition service coverage further compound these risks.

Mental‑health pressures amplify vulnerability, with rising symptoms of stress and anxiety undermining households’ ability to cope with shocks and invest in future livelihoods.

Making the shift to self‑reliance work

The Shirika Plan marks a historic shift toward integrated, development‑oriented solutions.

While the policy framework is in place, implementation gaps, especially around mobility and work permits, continue to limit labor market access.

The evidence is clear: integration without jobs will not deliver self‑reliance. As aid shrinks, enabling economic opportunity is no longer optional.

Success will hinge on lowering barriers to work and mobility, crowding in private investment, and strengthening local ecosystems while maintaining targeted, shock‑responsive support to protect the most vulnerable during the transition.

If the Shirika Plan can translate integration into real economic opportunity, Kenya can chart a shared development pathway in which refugees and host communities both thrive.

Without that pivot, vulnerability will persist, even in more integrated settlements.

The report, Building Evidence to Enhance the Welfare of Refugees and Host Communities in Kenya: Insights from Two Waves of the Kenya Longitudinal Socioeconomic Study is a product prepared under the Kenya Analytical Program on Forced Displacement (KAP-FD). KAP-FD is implemented by the World Bank, UNHCR, and Center for Effective Global Action (CEGA). It is supported by the PROSPECTS Partnership, which brings together the World Bank, IFC, ILO, UNHCR, and UNICEF, funded by the Kingdom of the Netherlands and administered at the World Bank through the Multi Donor Trust Fund for Forced Displacement.