How to Assess Private Sector Opportunity in Refugee Camps (Without Losing Your Soul)
Think of the word refugee for a second. What imagery comes to mind?
Of late, we’ve all seen the CNN videos, the aerial shots of families fleeing their homes, the NY Times op-eds, coverage of Trump’s heinous, ostracizing refugee rhetoric. And, of course, the hallmark image: rows and rows of tents emblazoned with humanitarian logos, arranged neatly in lines, an attempt to create some semblance of order in a situation characterized by such complete emotional and physical disarray.
When we won a large contract with the World Bank to assess the viability of private sector market entry and household energy distribution in refugee markets across Sub-Saharan Africa, I was admittedly overwhelmed. I knew from the outset that this project threatened to pit my pragmatic, business-minded self in direct contradiction with my humanitarian self, the Global Health major with an NGO background, the part of me that believes unwaveringly in our responsibility to help people in need, no questions asked.
At face value, the concept was simple: assess purchasing power, willingness to pay and current household energy supply in refugee & internally displaced person (IDP) camps across East Africa; based on that analysis, determine solutions to provide energy-saving products to displaced populations, ideally with private sector partnership & involvement.
In the social impact space, we talk often about how viewing base of the pyramid populations as consumers is the right thing to do. It puts them on an equal playing field and gives credence to the fact that they, just like you and me, make purchasing decisions based on not just needs, but also wants. I was curious to see how this concept would stand up with refugees and IDPs.
In order to assess a true representation of displaced populations in Sub-Saharan Africa, we chose to include a wide swath of crises and displaced populations in our analysis: refugee & IDP camps and settlements in Kenya, Uganda & Eastern DR Congo. Our initial questions: Where would private sector intervention be appropriate, positive and empowering? Where would it be inappropriate, negative and brash? And, most importantly, how would we make this complex determination?
Fast forward a few months and we’re standing in a market in Kakuma refugee camp. The air is thick and hot in this remote, desert region of Kenya. Turkana women, part of the “host community” in which the camp is situated, balance 20 shilling (US$.20) bundles of firewood on their heads, their necks cloaked in coils of brightly colored beads. Solar panels are jauntily stacked outside of tin-faced storefronts. The wide, rutted dirt road is lined with M-Pesa kiosks painted a dusty green, each crowded with refugees sending and receiving money from Kitale, Nairobi and beyond. Small shops flank the street as far as the eye can see and boda drivers call to potential customers. Women vend hot mandazi piled high in teal and pink plastic buckets and Congolese tailors display brightly-colored kitenge dresses on battered plastic mannequins.
The only sign that this is a refugee camp is the intermittent passing of a white Land Rover, speeding through the market with a cloud of dust in its wake.
Even more striking, this is just one of 8 large markets in Kakuma camp. Kakuma, home to almost 200,000 refugees from over 20 countries, has been in operation since 1991. Many people in Kakuma have been in the camp since then or shortly thereafter. They know how to make do, to create lives for themselves, to utilize the humanitarian systems (free schooling, food rations, etc.) while also building their own capacity to purchase consumer goods.
A visit to Kakuma is enough to turn most people’s perception of refugees and their socioeconomic status on its head. Refugees in Kakuma think long-term as consumers due to the amount of time they’ve spent in the camp and their likelihood of being there for a long time to come. They buy satellite dishes and TVs. Cell phone penetration is over 85%. Many people have dual SIM or smartphones. Kids play FIFA at internet cafes. The average refugee receives US$70/month in remittances. Equity Bank, Hashi Oil & KCB have all set up shop just outside the camp’s gates. Two refugee households interviewed hire Turkana host community women as house girls to cook and clean. Over 50% of refugees interviewed pay upwards of US$20/month to be hooked up to a generator in a patchy, low-quality micro-grid held together with duct tape. Each “block” of 10–20 houses generally has someone who is operating a generator business, presumably grossing >US$3000/month. It is clear that with appropriate financing schemes and market entry incentivization, Kakuma could be an opportune market for leading East African household energy businesses — and provide refugees with better products and services than the ones they are currently paying for.
However, each refugee camp and settlement we visited was different, dramatically influencing appropriate approaches to household energy solutions. The images I referenced in the beginning of this post — the rows of white tents, the mass exodus — do not apply to Kakuma. However, the situation in Eastern DRC was more reminiscent of this aesthetic. Mugunga III camp, located on the outskirts of Goma, was doubtless the most dramatic poverty I’ve seen. Refugees slept in mangled, leaking tents donated six years ago, meant as a temporary solution. Most did not have beds and were sleeping on blankets laid over sharp lava rock. The sky was hazy, almost apocalyptic — ashy from the half-visible volcano that looms beyond Virunga National Park’s border. Services in Mugunga III had dried up with funding diverted to sexier, more recent crises; not even healthcare was free. Cash trade and markets were incredibly scant; aspirational clean energy products (e.g. solar) were not even a near term possibility. In short, this was not a population where viewing refugees as “consumers” would be empowering. On the contrary, it seemed inappropriate to expect these people to pay for products and services — or to focus on profit at their expense.
Bottom line: Across settings, we can’t forget that these are refugees. Whether they can or cannot afford a solar panel or clean cookstove, their stories are wrenching — the adversity faced, the loss of life, the psycho-social toll of bearing witness to human atrocity in a place that you call home. If we are to push the humanitarian sector away from pure giveaways, we must do it with tact and respect for this population and the nuances of the crisis that made them flee, and we have to really understand how it will work, where it will work, and why. So, back to the key initial question: How do you substantiate and justify the different approaches to services for refugees, while factoring in such broad variance in socioeconomic conditions and capabilities?
Enter the framework approach. Through our field visits and observations, we developed a framework to assess and design appropriate solutions to each refugee market across East Africa- and to make it simpler and easier to move away from what most of the world sees as an opaque, homogeneous population (read: the “white tent” image of refugee camps). The framework considers the nature of the crisis and key market features (four key factors within each — a total of eight factors) to assess the viability of market-based interventions. The market conditions of a camp or settlement are directly linked to the crises and political handling of refugees. The framework is broken down into many slides and considerations; however, the 8 macro-level factors in the framework are outlined in the chart below.
How is this framework applied? In Kenya, refugees are confined to densely populated camps, where the average length of stay exceeds 12 years and population has ballooned to the size of a small city. As a result of the dense population, centralized markets in the camp have developed to serve a fairly immobile, rooted population. Because of the average length of stay, refugees make longer term purchasing decisions e.g. the purchase of consumer goods and “aspirational products.” Mobile penetration is high and remittances can be easily transacted via mobile money, further fueling purchasing of consumer goods. Limited humanitarian intervention in the solar space has engendered a market for solar products to serve the demand of this long-term, stable refugee population. You can begin to see the interplay between the factors in the framework in determining market viability.
The framework approach is not perfect. Within specific settings, the local market can and should be further analysed, then segmented to fit needs. Some refugees work for NGOs and earn US$60–80/month while other refugees don’t work at all. Some families are headed by orphaned children or elderly grandparents. Some families have just arrived in the camp and are making sense of what their new life looks like and how to make a living. For example, one Congolese family we met in Kakuma had just arrived a year prior; the father had been a pastor at home but was now making only a few dollars a week as a cobbler. Further analysis of market segments will help to determine which refugees are high potential and willing customers of improved products vs. those who are a better fit for humanitarian efforts.
The framework approach adds a layer of humanity to the sharp elbows of the private sector. While it’s a simplified model, the framework looks holistically at a place — its geopolitics, its volatility, its treatment of refugees, its existing market-based activity — and gives the private sector and their partners a sense for where and when refugees can be interesting customers, or when traditional aid is needed first.
Mandela once professed that “our human compassion binds us one to the other — not in pity or patronizingly, but as human beings.” This project — which took me to three countries and seven refugee camps in ten weeks — was an incredible opportunity to think critically and passionately about a population the world tends to pity and patronize. There is an incredible opportunity to allow— and empower — refugees as consumers where it’s relevant and to recognize their incredible vulnerability where it’s not.
