Displacement Financing

Re-Thinking the Displacement Financing Architecture

Opportunities for pursuing solutions to forced displacement in Ethiopia, Kenya, and Somalia have increased substantially since 2015. With different types of financing existing and applied in different contexts from local, national and regional, and global levels, what are some of the insights gathered for the future?

How can we use financing tactically to create an enabling environment for solutions to displacement?

Aid financing can be used to nudge incentives and broker deals or transactions. Financing agreements can be calibrated to promote inclusion, protection, and consideration of the specific needs of displaced people. This is particularly important in situations of forced displacement, where challenges are not only humanitarian or developmental, they are often first and foremost political, and therefore related to ensuring the rights and protections of displaced people.

ReDSS commissioned research with the central question to ask what type of financing is required to fund solutions to displacement.

The overall study logic is depicted in the diagram below.

This report emphasizes the need for innovative financing solutions to address displacement in the Horn of Africa. It underscores the critical importance of legal and policy environments in enabling durable solutions for displaced populations.

By highlighting efforts and key lessons drawn from Ethiopia, Kenya, and Somalia, the report notes progress in policy development, the growing recognition of displacement as a development issue, and the creation of new tools and partnerships.

However, challenges remain in achieving durable solutions. The report identifies the need for greater clarity in international efforts, a more strategic direction, and increased engagement of local private sectors.

Despite these challenges, the report concludes with a hopeful outlook. It identifies opportunities for progress through initiatives focused on urban development and economic inclusion for displaced populations.

This report offers a comprehensive examination of displacement solutions in Ethiopia. The report highlights the regional and demographic variations in displacement experiences in Ethiopia. It emphasizes the need for long-term, sustainable solutions (durable solutions) tailored to these specificities. It analyses the displacement context, providing a clear picture of the situation by detailing the number of refugees and internally displaced persons (IDPs) currently residing within the country’s borders. It also zooms into the Financing Landscape, shedding light on Ethiopia’s development progress and how financial resources can be utilized to support durable solutions for these displaced populations.

Finally, the report acknowledges the challenges and opportunities that lie ahead. It explores the structural challenges faced by regions hosting refugees and IDPs, while simultaneously identifying pathways towards inclusion and economic self-sufficiency for these displaced communities.

This report delves into Kenya’s evolving approach to refugee inclusion. Kenya’s refugee hosting strategy has shifted towards encampment, and national-level policy reforms have progressed slowly. This report explores the ongoing efforts to balance national security concerns with fostering a more inclusive environment for refugees. It also analyzes the uneven distribution of resources dedicated to displacement solutions, examining the critical role played by development partners and investigating the potential for engaging the private sector in a more substantial way. This section sheds light on the funding gaps that currently hinder progress.

Finally, the report concludes with a focus on Opportunities for Progress. It identifies potential avenues for advancing refugee inclusion within the existing policy framework. This section emphasizes the need for strategic investments and targeted reforms to bridge the gap between Kenya’s commitments and the realities faced by refugees.

This report offers a deep dive into financing for displacement solutions in Somalia. It focuses on three key areas: the policy environment, financing challenges, and opportunities for long-term development (sustainable development). Somali government and partners established key frameworks to support durable solutions. It also examines Somalia’s financing, including ODA, remittances, and the need for more ODA to fund development goals. Moreover, the report emphasizes integrating durable solutions with broader development efforts and moving from status-based aid to addressing specific vulnerabilities.

Finally, the report acknowledges challenges and opportunities. A lack of clear data on the scale of internal displacement remains a hurdle. The need for prioritized and sequenced investments is emphasized. Additionally, the potential of flexible, multi-year financing for transitional activities is explored as a way to strengthen government capacity and support displaced communities.