An Afghan asylum seeker set himself on fire in Indonesia on Tuesday in protest at his seven-year wait for resettlement in a third country, a local refugee coordinator said.

The man suffered severe burns and was sent to hospital.

He was taking part in a rally with other displaced Afghans outside the office of the United Nations refugee agency in Medan on Sumatra island, coordinator Muhammad Juma said.

Thousands of refugees, more than half from Afghanistan, are stuck in limbo in Indonesia while they wait for resettlement elsewhere, as Jakarta prohibits them from working legally.

The man has been in the Southeast Asian country since the beginning of 2016, Juma told journalists.

The coordinator said at least 14 Afghan refugees had taken their own lives in Indonesia in recent years and six others had attempted suicide.

He called on the Indonesian government and the UN to do more to address their plight.

Mitra Salima Suryono, a spokesperson for the United Nations High Commissioner for Refugees, said the agency was closely following the incident.

"We are very concerned about the incident and will keep coordinating with related parties to overcome the situation," she told AFP.