By Tolossa Asrat – KANERE Volunteer Writer, September 2021
Following the outbreak of COVID-19, remittances sent from the US and Western countries to Kakuma Refugee Camp and Kalobeyei settlement have reduced significantly.
Global restrictions on the movement and activities of people because of the pandemic have affected the amount of money transferred to families and friends abroad who are living below the poverty line.
Remittances are a key source of income and lifeline for many families living in Kakuma Refugee Camp and the nearby Kalobeyei settlement. Studies have shown that remittances provide macroeconomic benefits as well as contribute to poverty reduction, especially for female-led households. The fall in remittance rates began after the outbreak of COVID-19.
According to remittance service providers in Kakuma, this trend is largely due to the loss of jobs and the movement restrictions in Western countries.
Remittance service providers in Kakuma 1, a section of the refugee camp, explained that the decline is significant and it is forcing them to shift their business model to make money in other ways. According to Abdi Hirsey, a well-known remittance provider in Kakuma 1, “the amount of support coming now is very small as compared to the support before the pandemic.”
Before the onset of the pandemic, refugees living in Kakuma were already facing many challenges, including suicide, trauma, limited access to services, human rights violations, and a lack of opportunities. COVID-19 only exacerbated both the health and socioeconomic situation of residents. It has severely impacted the livelihoods of long-term residents in the camp. Kakuma Refugee Camp reported its first COVID-19 case on 13th March 2020.
Since the pandemic, Western countries hosting refugees and migrants have introduced lockdown and movement restrictions to curb the spread of disease. While these measures save lives, they also come with unintended consequences for vulnerable populations, like refugees living in protracted situations in Kakuma Refugee Camp. Such measures put pressure on economies in the West, which leads to the drop in remittances sent to relatives in Africa and elsewhere.
Remittances are usually sent through a trust-based global financial transaction system called hawala, which is dominated by the Dahabshiil, Amel, Dalsan, and Iften financial institutions inside Kakuma Refugee Camp. A 2018 report by the International Finance Corporation (IFC) revealed that refugees draw income from a range of sources, relying on small businesses, aid, and remittances. Remittances sent through the above institutions and M-PESA agents, who use Safaricom’s money transfer service, came to at least USD 200,000 a month.
Launched by the Vodafone group and Safaricom in 2007, M-PESA is the largest mobile network operator in Kenya that offers payments and micro-financing services.
According to the IFC report, this monthly amount is likely due to the large diasporas of Ethiopians, Somalis, Congolese, Burundians and South Sudan nationals across North America, Europe and the Middle East.
Many refugees have been living off food relief and small e-vouchers from aid agencies, but these donations cannot sustain them for one month.
“I used to get $100 every two months before the COVID-19 outbreak, but now I am getting only $50 every two months,’’ Eva, a refugee in Kakuma 1, explained.
“To protect the economies, some countries also restrict the amount of currency [that can be sent to Kenya] to keep their [own] economy safe,” explained a remittance service provider who preferred to remain anonymous. According to him, his clients were receiving a lot more remittances from the US compared to the other western countries.
Since the outbreak, life for refugees in Kakuma Refugee Camp and the nearby Kalobeyei settlement has turned upside down. Most countries have put in place measures to support the most vulnerable segments of society by providing different economic benefits, including tax cuts for small and medium enterprises and income support for the neediest people. During this pandemic, the Kenyan government dedicated 10 billion KSh (USD 93 million) to support the elderly, orphans, and other vulnerable groups in the form of cash transfers. However, refugees living in Kenya have been left without any social protections or any economic stimulus packages.
Private sector businesses have also introduced different schemes to support their customers. But these benefits are a pie in the sky for refugees living inside Kakuma Refugee Camp and Kalobeyei settlement. Safaricom, the giant telecommunication provider in Kenya, together with Central Bank of Kenya (CBK), waived money transaction charges and raise daily limits for mobile transactions to reduce cash handling in order to curb the spread of the virus. Although Safaricom is the sole telecom provider in the camp, as 48 per cent of the total refugee population are subscribers, refugees were excluded from the waiver because of their refugee status.
In Kakuma Refugee Camp, donors have been looking at new ways they can support the most vulnerable refugee communities: widows, single mothers, unaccompanied minors, the elderly, people with disabilities, the LGBTIQ community, and people with chronic illnesses. A six-month donation scheme has begun in February 2021. Under the scheme, 100 KSh (USD 1) per day would be sent directly to the phones of the most vulnerable, but the program is expected to end in August 2021.
This new method of supporting refugees could be a revolutionary game changer in the Kakuma Refugee Camp. However, economists argue that people receiving any kind of aid risk becoming reliant, and suggest that time-limited cash aid that keeps people out of refugee camps seems to have a lower risk of incentivizing learned helplessness.
About 1,000 refugees have so far received the assistance according to the Twitter handle of the program coordinator. Although such support can alleviate urgent needs, according to the economists, this type of aid does little to help self -reliance.
Following the recent spike in suicide cases, concerned aid agencies have showed some interest in re-initiating a mental health counseling service in all centers all over the camp, but many refugees have expressed concern with the quality of mental health services, saying that they are unsatisfactory.
Given that the amount of humanitarian aid provided to Kakuma’s refugees is expected to further decline, it is vital to predict the impact of the COVID-19 pandemic on the lives of refugees.
Concerned stakeholders should continue to come up with different strategies to address existing challenges and increase their support to neglected refugees.