Refugee Economies in Addis Ababa: Towards Sustainable Opportunities for Urban Communities?


The report examines the precarious economic lives of refugee communities in Ethiopia’s capital, Addis Ababa, and their interactions with the host community.

Refugee Economies in Addis Ababa: Towards Sustainable Opportunities for Urban Communities?

Addis Ababa has only 22,000 registered refugees, out of a national refugee population of 900,000. They comprise two main groups: 17,000 Eritreans and 5000 Somali refugees. Based on qualitative research and a survey of 2441 refugees and members of the proximate host community, we examine the economic lives of the refugee communities and their interactions with the host community. We draw upon the data to consider the prospects for a sustainable urban response in the context of Ethiopia’s adoption of the new Refugee Proclamation in 2019, which appears to provide refugees with the right to work and freedom of movement.


Despite the contrasting basis on which Eritreans and Somalis have been selected to live in Addis – the former based on their capabilities and the latter on their vulnerabilities -- and their very different levels of education, both communities face extreme precarity. Prior to implementation of the new Proclamation, refugees are not allowed to work or register businesses. 79% of Eritrean refugees and 93% of Somalis are unemployed. Even among those who work, average income levels are significantly lower than for the proximate host community. Meanwhile, both populations have much worse welfare outcomes than hosts in terms of indicators like mental and physical health, and child school enrollment.

 Of the tiny minority who work, 86% of Eritreans are employees and 14% are self-employed, while 57% of Somalis are employees and 43% are self-employed. The top employment sectors for Somali refugees are cleaner/maid, interpretor/translator, restaurant worker, hawking, and commerce. For Eritrean refugees they are beautician/hairdresser, mechanic, daily labourer, teacher, and carpenter. Where refugee businesses do exist, they are usually unregistered, do not pay tax, were created without significant start-up capital, and rarely employ staff.


Given the absence of socio-economic rights and opportunities, refugees rely upon three sets of social networks: with hosts, other refugees, and transnationally. Hosts are generally sympathetic to refugees and some self-identify as having the same ethnic background as refugees. They jointly register businesses with refugees and serve as citizen ‘guarantors’, which every Eritrean refugee is required to have as a condition for their OCP status. Other refugees provide forms of mutual self-help, and those with limited means often pool resources, including by living together. Meanwhile, in the absence of work, many refugees are dependent upon remittances.


Both refugee communities feel a sense of boredom, idleness, and hopelessness. They regard the lack of economic opportunity as having a detrimental effect on their physical and mental health. In this context, most see no future in Ethiopia, and over 90% of refugees aspire to move onwards to Europe, North America, or Australia, although only 60% believe this is realistic, and an overwhelming majority would prefer to take legal rather than illegal migration routes.


Logically, there seem to be three ways to meet refugees in Addis’ aspirations. First, to create more legal pathways for migration or resettlement. Second, to create greater socio-economic opportunity for refugees and host communities within Addis, Third, to create socio-economic opportunities, including jobs for refugees, elsewhere in Ethiopia. We suggest that each of these options present challenges, and each has a role to play. 28% of Somalis and 56% of Eritreans would be interested in relocating to a job at an industrial zone as part of the Ethiopia ‘Jobs Compact’.


Developing a coherent urban refugee programme is important, we argue, because urban refugee numbers in Addis are likely to increase both as a result of the new regulation and because of wider trends in urbanization. Refugees, the Ethiopian Government, and the international community all have an interest in making urban refugee settlement sustainable.