# 7. Discussion: Economic participation and inclusion in service provision

<mark>Assuming a total of 1.17 million Sudanese refugees who are in Chad (of whom 426,000 are existing refugees from Sudan and the remainder new arrivals), it translates into a need for aid to cover the subsistence of all Sudanese refugees to US$ 543 million. However, since the existing Sudanese refugees already earn incomes, this amount reduces to US$437 million.</mark><sup>12</sup> <mark>If all newly arrived refugees would be as integrated as the existing refugees from Sudan the need for subsistence aid would be: US$ 252 million. If all Sudanese refugees would be fully integrated economically, the need for assistance could potentially drop to FCFA 112 per refugee per day or US$89 million.</mark> <mark>When considering the factors that might contribute to greater economic participation of refugees, the results are seemingly contradictory. At one level, no evidence is found that access to land or ownership of livestock increases the income of poor refugees (reduces the pre-assistance poverty gap). Only human capital as well as social relations with hosts c</mark> ontribute significantly to increase the earnings of refugees. But when refugees are matched to hosts and when estimating a full participation scenario in which Sudanese are assumed to have comparable access to land and other productive assets, then the poverty gap reduces considerably, and projected incomes increase.

<mark>To explain this, it is critical to realize how limited are the economic opportunities open to refugees. First, refugees live in extremely remote areas with so few economic opportunities that even among hosts poverty levels are 70 percent. Second, despite living in rural areas, only 50 percent of refugees engage in agriculture, and of those who do, 90 percent rent their plot of land, thus foregoing an important part of the profits associated with agriculture. Asset ownership by refugees is simply too rare, and the assets owned too few, to make a difference. Whereas 90 percent of the members of host communities own at least one plot of land, the share among Sudanese refugees is only 4 percent. Even among these lucky few, the plots are significantly smaller. While 60 percent of the members of host communities own an average of 12 cattle per household, just 24 percent of Sudanese refugee households own even 3 cattle (World Bank 2021).</mark> <mark>Lacking opportunities in agricultural production, Sudanese refugees engage in other sources of employment, notably wage labor. About 40 percent of Sudanese refugees work for a daily wage, compared with only 15 percent of residents in host communities. Yet the average hourly wage for Sudanese refugees is about half that in host communities, mostly because refugees can only access casual low-skill occupations that pay the worst wages (World Bank 2021). Lacking opportunities in agricultural production, Sudanese refugees also engage in other sources of employment, notably businesses, although such enterprises face fierce competition from host communities.</mark> <mark>Low assets, and low returns to those few assets refugees possess explain our results. Together they are indicative for future policy directions, which should comprise of a combination of (i) increasing asset</mark>

> 12 Made up of US$91 million for existing refugees and US$346 million for new arrivals from Sudan. Assumes perfect targeting. In practice, leakage to the non-poor may be 30 percent or even more, requiring concomitant higher amounts of assistance. Excludes refugees from other countries, totaling approximately 150,000. <mark>Based on the presence of 1.174 million refugees from Sudan, an inflation rate of 12.4 percent since the date of the survey and an exchange rate of FCFA 607 to the dollar. New arrivals are assumed not to earn any income and to require the poverty line in basic needs assistance.</mark>

18