There are around one million refugees and asylum-seekers registered with the UN High Commission for Refugees (UNHCR) in Egypt. Sudanese are the largest group, followed by Syrians, and they live mostly in Greater Cairo and Alexandria, a UNHCR fact sheet said.
However, the actual number of forcibly displaced individuals residing in Egypt is likely to be much higher, as many refugees and migrants remain unregistered, said Dina Abdel-Fattah, an assistant professor of economics at the American University in Cairo (AUC).
According to the government, 1.5 million Sudanese have fled to Egypt since the onset of the conflict in Sudan in 2023, and this unprecedented surge in the number of refugees arriving in Egypt has placed additional strain on already overstretched resources.
In order to find out the extent of the impact of refugees on Egypt’s economy, a recent study, “The Impact of the Influx of Forcibly Displaced People on the Egyptian Economy,” was carried out by the AUC Center for Migration and Refugee Studies (CMRS) and was produced under the International Labour Organisation’s (ILO) Youth for the Future Project in collaboration with its PROSPECTS programme.
Acknowledging higher spending on refugees by the government, the study showed that the annual education expenditure for refugee children now exceeds $20 million. First-year hosting costs are estimated at $10,000 per refugee.
Meanwhile, the Egyptian economy has undergone several shocks over the past decade and has high debt and a limited ability to direct funds to social protection and human capital development.
However, the study argues that refugees contribute to the economy as well as benefiting from it. According to Abdel-Fattah, who presented the findings of the study, refugees and migrants contribute to the Egyptian economy through labour supply, consumption, and investment in small businesses.
She said that the study showed that a significant portion of the refugee population is engaged in the informal employment sector, which is considered not only underutilised potential for the Egyptian economy, but also a place where refugees may compete with Egyptians for low-skilled jobs.
“The vulnerability of these populations is exacerbated by their limited access to formal employment, primarily due to the spread of informality in the Egyptian labour market, as well as the cumbersome processes of obtaining work and residence permits,” Abdel-Fattah said.
According to the study, 40 per cent of refugees are poor or extremely poor, and the Egypt Vulnerability Assessment for Refugees has showed that 77 per cent of refugee households report difficulties in meeting basic needs.
The study utilised innovative methodologies to overcome the challenge of the lack of data availability. These involved the use of satellite data to show the luminosity of certain areas, with this being used as a proxy for economic activity. This approach has been used in Egypt and internationally before, Abdel-Fattah said, adding that the study also utilised focus group discussions and surveys.
One of the main findings of the study is that there is no evidence that the arrival of the refugees has depressed economic activity. This means that they represent an opportunity that can be leveraged into something positive for the Egyptian economy.
Among the study’s list of recommendations is the introduction of pilot time-bound and sector or region-specific permits in industries with identified shortages of labour and collecting refugee skills data to match market gaps.
The study showed that refugees are disadvantaged in the labour market not because they are undereducated or unskilled but for other reasons.
The authors of the study call for gradually expanding permits and regularising refugee-run informal employment. It recommends simplifying business registrations and reducing fees for micro and small enterprises for both Egyptians and refugees.
Employers and workers’ organisations should also play a role, Abdel-Fattah said, by expanding refugee employment in shortage sectors.
“We are not saying replacing Egyptians, but rather identifying sectors where shortages exist,” she stressed. Moreover, employers could provide training and retraining programmes to raise the skills of refugees to meet existing shortages and compensate them with decent wages.
The study also recommends launching livelihoods programmes for both refugees and Egyptians in refugee-dense areas. Abdel-Fattah said these recommendations were explicitly highlighted by refugees in focus groups, who also said that activities that could bring Egyptians and refugee young people together, like football matches, could break certain barriers.
In the area of education and health inclusion, the study calls for allowing refugees to enroll in schools and access health services regardless of any missing documents. It shows that as a coping mechanism 40 per cent of refugees withdraw their children from education and 50 per cent postpone or skip medical treatment.
In a move to encourage refugees to legalise their status, the government stipulated last year that only registered refugees could access services such as education and healthcare. Because of the legal barriers to access education, refugees often resort to community schools, which are usually limited in capacity and charge high fees.
As a coping mechanism, refugees may choose to withdraw their children from education altogether, the study said.
Government-led awareness campaigns highlighting refugee contributions to the economy and society are also recommended in the report to improve social cohesion and correct misconceptions that may fuel tensions with host communities.
Refugees have often been blamed for Egypt’s economic challenges.
International donors should share in the responsibility for refugees by expanding funding for housing and infrastructure, educational capacity, refugee integration, and skills-improvement pilot projects, Abdel-Fattah said.
* A version of this article appears in print in the 2 October, 2025 edition of Al-Ahram Weekly
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