Spending and investment by South Sudanese refugees displaced to the West Nile region of Uganda is
beginning to drive growth. Increases in the number of businesses and overall revenue in local refugee
settlements demonstrate the growing contribution of these individuals to emerging local markets. At the
same time, an influx of humanitarian actors are providing in-kind food assistance and direct delivery of
livelihood support, strategies which undercuts the development of key markets needed to support refugee
and host community livelihoods over the coming years. There is consistent evidence that West Nile’s
marketplaces have the capacity to support cash transfers, which generate local revenue and increase
refugee business investments. But current commitments to a greater use of cash transfers are just a starting
point. Aid agencies must support demand-driven livelihoods opportunities and growth in weak markets,
working with local businesses and market institutions to improve refugee and host community households’
ability to earn an income. To advance these efforts, the Department for International Development (DFID)
has funded Mercy Corps, Palladium, and DanChurchAid (DCA) to implement the ReHope project. Taking a
market systems development approach, the project’s strategy involves channelling coupons for partial
subsidies on improved seeds through local agro-dealers, improving agro-dealers’ ability to access quality
inputs from national seed companies, promoting land sharing between refugees and host communities, and
working with produce trading companies to attract them to the area and assist in developing agent networks. By leveraging the power of markets, these strategies aim to generate durable income opportunities in
refugee areas and greater value for money on aid investments. In the first growing season, willingness of
refugee farmers to invest in seeds was strong, with 76% of coupon recipients following through to purchase
inputs. Partner agro-dealers also expanded their businesses in the refugee settlements and reported a
growth in sales of unsubsidized inputs.
Based on these initial project findings, this brief calls for a continued transition away from in-kind aid to an
approach that emphasizes partnerships with local businesses, reductions of subsidies and demand-driven,
market-based, livelihoods support. This shift requires a combination of market systems development and
humanitarian expertise, longer term funding strategies to strengthen local markets, and investments to
understand long-run program impacts on markets and households.