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The victim, who ran a small shop in the Dagahaley camp, was attacked by four or five unidentified gunmen on Friday, community leader Abdifatah Ismail, himself a Somali refugee, told AFP.
“We heard gun shots at around 8 pm… An hour later, I saw the body of the man in his shop,” he said.
Dadaab is the world’s biggest refugee camp complex, sheltering around 460,000 people.
The overwhelming majority are Somalis fleeing the permanent state of civil war as well as famines and droughts in their country for the past two decades.
Security is a permanent concern in Dadaab.
In October, two Spanish nationals working for Medecins sans Frontieres (MSF) were kidnapped and taken across the border into Somalia.
Immediately after, Kenya sent its troops into southern Somalia in pursuit of Al-Qaeda-affiliated Islamist Shebab insurgents, holding them responsible for the abductions as well as other attacks on its territory.
Since then attacks against police have surged, often carried out with explosives planted on the side of the road.
Refugees have also been attacked. In March two refugees were gunned down and a third wounded.