The United Nations High Commissioner for Refugees (UNHCR) has issued a warning that a worsening funding crisis may leave nearly 8.3 million refugees and forcibly displaced people without critical assistance in 2026, potentially pushing protection systems in several countries toward collapse. The agency is confronting one of its most severe funding shortfalls in recent history, following reductions in aid from the United States and other donors.

According to a recent UNHCR report, the agency faces a $5.79 billion funding gap, after a 24 percent decline in available funds between 2024 and 2025. As of July 2026, UNHCR had received only 32 percent of the $8.5 billion it requires for the year, while the number of refugees, internally displaced persons, and stateless individuals remains near record highs. The population under UNHCR’s mandate is projected to reach approximately 131.2 million by the end of 2026, up from 129.4 million at the close of 2025.

UNHCR officials emphasize that persistent funding cuts are undermining their ability to provide essential support and protection, including registration services, child protection programs, and assistance for survivors of gender-based violence. Dominique Hyde, the agency’s external relations chief, cautioned that below a certain funding threshold, refugee protection systems do not merely shrink but can cease functioning altogether, increasing the risk of violence, exploitation, and abuse for displaced populations.

The report highlights specific challenges in countries hosting large numbers of displaced people. In Chad, where refugees fleeing conflict in Sudan have sought shelter, approximately 319,000 individuals face delays in registration processes, and around 200,000 women and girls risk losing access to safe spaces and preventive programs. In Sudan, now in its fourth year of civil war and considered the world’s worst displacement crisis, registration activities were suspended for the first five months of 2026, leaving roughly 140,000 refugees and asylum-seekers unregistered. Meanwhile, in Afghanistan, funding cuts have resulted in a reduction of UNHCR grants for returnees—from $375 to $170 per person—amidst an influx of over one million people returning from neighboring countries such as Iran and Pakistan.

UNHCR has already implemented various cost-saving measures, including reducing its workforce by one-third in 2025, closing offices in 140 locations, and discontinuing operations in 15 countries compared with the previous year. However, the agency warns that these efforts are insufficient to compensate for the funding deficit. Moreover, an increasing portion of donor contributions is earmarked for specific uses, rising to 51 percent in 2026 from 19 percent five years ago, limiting UNHCR’s flexibility to allocate resources to urgent needs.

The funding crisis threatens to erode displacement protection systems worldwide, potentially leaving millions of vulnerable people without documentation, humanitarian assistance, or vital services, according to the agency. UNHCR emphasizes the need for increased, flexible funding to prevent a breakdown of support structures and to safeguard the rights and wellbeing of displaced populations globally.