Federal officials inch closer to securing 180 million dollars in funding from the World Bank to expand a welfare programme designed to bring refugees back to the workforce while in host countries. They hope to see the second phase, which will run for five years beginning July this year, reaching 2.5 million people, and around a quarter will come from refugees.

The initiative was launched five years ago with 100 million dollars in loans secured from the Bretton Woods institution. The federal government requested additional financing a year before the project's first phase was scheduled to come to a close in December last year. Officials from the Ministry of Finance and World Bank's country representatives discussed the proposal last week to expand the programme dubbed the "development response to displacement impacts."

“They've reached an agreement,” Nigatu Bogale, national project coordinator under the Ministry of Agriculture, told Fortune.

Officials had initially requested 130 million dollars in loans from the World Bank; however, the agreement changed to a grant arrangement with the understanding that the second phase would directly target refugees. The first phase targeted host communities, with a half-year extension ending next month. The extension was necessary to complete unfinished works in two weredas of the Somali Regional State, which had been interrupted due to security concerns, according to Nigatu.

“We're also hoping to resume work suspended in the Tigray Regional State," he said.

The Tigray Regional State hosted five large refugee camps where the project was frozen following the outbreak of armed conflict in November 2021. They are part of the 27 camps hosting 845,000 refugees and asylum seekers. The Benishangul-Gumuz regional state hosts the highest number, while refugees from South Sudan have the highest number comprising 46pc of the refugee population, according to the UNHCR.

Refugee shelters and camps are characterised by limited access to essential social services and infrastructure, weak institutional capacity, high unemployment rates and poverty. The presence of refugees puts strains on the already limited resources and opportunities available to host communities. A study conducted by the World Bank in 2017 revealed that confrontations, disputes and conflicts over resources are common between host communities and refugees. These altercations sometimes result in fatalities.

According to the study, conflicts are more frequent in the Gambella, Benishangul-Gumuz, and Somali regions. Two years ago, nine South Sudanese refugees were killed near Pugnido, one of the largest camps in Gambella. A camp hosting over 10,000 refugees in Tongo town, in Benishangul-Gumuz, was razed in January this year. The United Nations High Commissioner for Refugees (UNHCR) announced that 20,000 refugees in the regional state had been displaced due to instability.

Close to 70,000 refugees live in five camps in Benishangul-Gumuz Regional State. About 60 schools and two dozen health centres have been erected in these camps, financed by the World Bank. Farmers who cultivate 38hct of land in the region also benefited from agricultural machinery and two irrigation projects under the initiative, according to Negatu.

No less than 223 schools and 97 health centres were erected in 16 weredas in five regional states during the first phase. Close to 7,000 farmers who live within 20Km radius of the camps were provided agricultural equipment and small-scale irrigation projects. Around 1.2 million beneficiaries must cover five percent of costs under the programme, thus contributing 124 million Br.