Uganda's Ambitious Refugee Policy Faces Unprecedented Financial Strain

Uganda has long been lauded globally for its progressive refugee policy, offering asylum seekers the rights to work, move freely, and access public services – a stark contrast to practices in many other nations. This celebrated model is now under immense pressure, facing its most serious test in a generation.

As of April 2026, Uganda hosted over two million refugees and asylum seekers, primarily from the Democratic Republic of Congo and South Sudan. While the nation’s commitment to refuge is commendable, the funding necessary to sustain these numbers has not kept pace. By the end of 2025, the refugee response was only about 25% funded, with projections for 2026 indicating an even more dire situation, leaving millions at risk of losing critical health and nutrition services.

The International Rescue Committee (IRC) has already been forced to cease health services in eleven refugee settlements due to funding cuts. The UNHCR estimates that providing essential services requires approximately $16 per refugee monthly, but current funding levels only allow for about $5 per person.

This funding crisis is leading to a significant shift, with refugees increasingly migrating from settlements to urban centers like Kampala, seeking economic opportunities amidst dwindling aid. While the right to work is legally recognized, financial success in the capital relies heavily on capital, documentation, and market access, presenting considerable hurdles for new arrivals.

Recent trials, such as the IRC’s Re:BUiLD program, have shown promising results with direct cash grants. A $540 grant significantly boosted household well-being and business profits for both refugees and host community members. However, mentorship programs yielded mixed results, with success depending heavily on the quality of the mentor-mentee relationship.

To address these challenges, Uganda is exploring new initiatives that focus on economic empowerment and market integration, aiming for sustainable self-reliance. Projects like the World Bank’s Development Response to Displacement Impacts Project are scaling up, with Phase II designed to create tens of thousands of jobs and improve access to services for millions, including refugees. Despite these efforts, structural barriers such as documentation issues, limited access to financial services, and language barriers persist.

Economists advocate for a shift from a purely humanitarian approach to a developmental one, integrating refugee economic inclusion into national planning and collaborating with financial institutions. As international funding wavers, Uganda faces the monumental task of sustaining its open-door policy through innovative local solutions and policy reforms to prevent a collapse of its refugee support system.

Source: Daily Monitor (Uganda)