Although refugee camps have been negatively perceived as places where migrating population get settled and access basic requirements from the host population, this notion seems to be different when viewed from livelihood perspective. In other contexts, Refugee Camps have played a key role as stimulants of livelihood activities. The fact that refugee camps have been supported nationally and internationally, they have attracted investment in services including; schools, health centres, markets,

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... creational services and artisanal skills training. Such services have been used by other communities surrounding refugee camps. Apart from providing labour to the surrounding communities, the camps have been also centres of trade between the host population and refugees. This positive element of refugee camps has not been captured the attention of many researchers as well as policy makers. This paper examines the effects of closure of refugee camps on livelihoods of surrounding villages using a case of Mtabila Camp located in western Tanzania. Three Villages of Mugombe, Buhoro and Nyachenda were selected for detailed examination. A sample size of 66 households from each village was chosen for detailed interviews. These interviews were complemented with observations studies in each village and interview with Kasulu District and sub-ward Officials. Findings indicate that the closure of a refugee camp had negative effects on peoples' livelihoods in terms of retrenchment of unskilled labour force, decline in agribusiness, trade and lumbering. The closure of the refugee camp led to the closure of some social services such as health centre, schools, water supply and routine maintenance of the road. These services were also being used by host population. The closure of the camp culminated in decline of agricultural production that was dependent on unskilled labour from refugees. It is recommended that alternative livelihood activities ought to be developed if communities surrounding refugee camps are to sustain their living.