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The Somali and Gambella regions host about 70% of the 1.1 million refugees in Ethiopia. The two regions are also known for protracted displacement but also an ever-increasing number of refugees. Currently, with a dramatic decline in the resource allocation for humanitarian and development from major donors, refugee hosting governments are grappling with uncertainties over the future of people in displacement. The need for transition from a ‘care and maintenance’ approach to engagement in sustainable livelihoods and working towards ‘self-reliance’ is more vital than ever before. This requires, besides favourable national policies, an understanding of the critical significance of local contexts. Based on fieldwork among the displacement-affected communities in the Somali and Gambella regions, in this presentation I will discuss the complex local contexts that enable or constrain refugees’ local integration and paths to ‘self-reliance’.