Refugee Economies in Dollo Ado: Development Opportunities in a Border Region of Ethiopia


The report examines the economic strategies of Somali refugees in the cross-border economy of Ethiopia's Somali region.

Refugee Economies in Dollo Ado: Development Opportunities in a Border Region of Ethiopia

The five Dollo Ado refugee camps were created between 2009 and 2011 in the Somali Region of Ethiopia. According to UNHCR registration data, they host around 220,000 almost exclusively Somali refugees within a semi-arid and isolated border district within which refugees outnumber the host population. The camps and host community have benefited significantly from the IKEA Foundation’s 75m Euro investment in the camps over a seven-year period. This globally unprecedented level of private sector investment has created a range of new opportunities in education, entrepreneurship, energy, agriculture, the environment, and livelihoods.

Most refugees remain poor and dependent upon food aid. Only 21% of refugees have an income-generating activity, compared with 29% of the host community, and the largest source of employment for both communities is with humanitarian NGOs and international organisations, or related government agencies like ARRA. The median reported income for refugees with a job is 28 USD/month and 105 USD/month for hosts.

The international community has so far focused mainly on developing livelihoods opportunities in agriculture, livestock, and commerce. But relatively few refugee households derive their primary income source from these activities. 4% of refugee households are involved in agriculture (compared with 16% of host households), animal cultivation is not generally a commercial activity and less than 2% of refugees have it as their primary income-generating activity, while only 5% of the adult refugee population are self-employed.

We show that for the majority of refugees and host community members, the economy is based on two inter-related elements: aid and the cross-border economy. Food assistance, services such as education and health, and the employment sources that result from the international humanitarian presence are crucial to the survival strategies of refugee and host community households. But so too is the often neglected cross-border economy with South-Central Somalia..

The country-specific focus of the international community means that the importance of these cross-border dynamics, and the role of the camps within transboundary household strategies, often go unrecognised. However, the Dollo Ado economy cannot truly be understood through a purely state-centric lens. It relies upon recognition of the transnational networks that have long shaped the socio-economic life of the region.

Within the camps, there is also a complex political economy relating to aid. For example, food rations are often sold to host community brokers, who sell them onto businesses such as pasta factories, which then serve as pasta wholesalers to retail shops in the refugee camps. Meanwhile, access to opportunities such as cooperative membership in camps is sometimes mediated by the Refugee Central Committees, which are sometimes accused to favour the majority clan at the expense of minorities.

Refugee-host relations within the district are exceptionally positive. They share a common ‘Somali’identity and culture, language, and religion and the host population derives considerable material and perceived benefits from the presence of both refugees and international humanitarian organisations. This offers an opportunity for socio-economic integration.

The next challenge is to ensure sustainable economic opportunities for both refugees and the host community by creating growth and development within the border economy. This will require building on the legacy of the IKEA Foundation’s investment and extending its benefits across the community. Recognising and building upon the realities of the cross-border economy; improving infrastructure and transportation; catalysing growth in the digital economy; creating viable capital markets; developing a formal labour market; moving from a camp to a settlement model, all represent some of the untapped opportunities.

Although, Ethiopia’s refugee-hosting border-regions are all distinctive, the report offers insights into the type of evidence needed in order to identify mutually beneficial development opportunities for refugees and hosts in other peripheral regions of the country, such as Gambella, Jijiga, and Shire.