The United Nations High Commissioner for Refugees warned on Tuesday that the deepening funding crisis could deprive nearly 8.3 million refugees and forcibly displaced people of assistance during the current year, and could push protection systems in some countries towards collapse, as the global number of forcibly displaced and stateless people remains close to record highs.
Funding gap puts pressure on UNHCR response
In a new report, UNHCR said it faced a funding gap of 5.789 billion dollars, in one of the worst funding crises in its history, after the United States and other countries reduced their aid. The funds available to UNHCR fell by 24 per cent between 2024 and 2025, affecting its ability to respond to growing needs.
By July 2026, UNHCR had received only 32 per cent of the 8.505 billion dollars it had requested to fund its work during the year. The shortfall comes as the agency expects the population covered by its mandate to rise to 131.2 million by the end of the year, compared with 129.4 million at the end of last year.
The 26-page report explains the impact of budget cuts on refugee registration, child protection programmes and services for survivors of gender-based violence. UNHCR warned in the report: “When a system falls below a certain level, it does not shrink; it fails,” referring to the limits of the protection system’s ability to continue operating as resources decline.
Impact of funding shortfalls in host countries
In Sudan, which the United Nations describes as home to the world’s worst displacement crisis because of the civil war that entered its fourth year in April, around 140,000 refugees and asylum seekers remained unregistered by mid-year. This followed the suspension of registration activities during the first five months of 2026. In Afghanistan, UNHCR reduced the grants provided to people returning to the country from 375 dollars to 170 dollars per person.
Afghanistan received more than one million returnees during the current year alone, through both forced and voluntary returns from neighbouring countries, including Iran and Pakistan. UNHCR said that taking further cost-cutting measures would not be enough to make up for the funding shortfall, after it had already reduced its workforce by 33 per cent during 2025.
Scaling back operations and restricting spending flexibility
It has also closed offices at 140 locations and halted operations in 15 countries compared with its operations in 2024. The problem is not limited to the decline in the amount of funding, as UNHCR noted a rise in the proportion of donor funding strictly earmarked for specific areas of spending.
This share rose to 51 per cent during 2026, from 19 per cent five years ago, limiting the agency’s ability to redirect resources towards the most urgent needs and priorities. UNHCR warned that continued declines in funding were gradually eroding the protection system and increasing the likelihood of refugees remaining without official documents.
It also threatens to leave survivors of gender-based violence without the support and services they need, as the gap widens between available resources and the number of people covered by the agency’s programmes.
