Uganda can create higher labor productivity jobs by improving trade, business environment, World bank
Uganda’s economy needs to gradually create more jobs for its fast-growing and youth population; to accelerate economic growth and drive transformation, these jobs will need to bring higher labor productivity, says a new World Bank report.
The report, “Uganda: Jobs Strategy for Inclusive Growth,” identifies ten challenges to achieving this, including slowing trends in economic growth. Labor force growth is quickening, urbanization is sluggish, as is the transition from non-wage to wage employment, notes the report.
With a median age of just 15.9, Uganda is the world’s second youngest country, whereas around 700,000 young people reach working age every year. This number will rise to an average of a million in the decade from 2030-2040, potentially exacerbating the mismatch between labor demand and supply. While Uganda’s youth are renowned for being highly enterprising, there is not enough demand for all of them to be producing for the domestic market. Fewer than 4 percent of the self-employed are employers (job creators), 52 percent are working for themselves, and 43 percent work as unpaid family workers.
Nearly two thirds of Ugandans remain employed in agriculture, and almost three quarters of young Ugandans enter the workforce on their family farm, according to data from the 2016/17 Uganda National Household Survey. Global experience published in a report by the World Bank Jobs Group titled, “Pathways to Better Jobs in IDA Countries,” suggests waged employment allows economies to grow faster; reduces poverty faster; and brings more reliable earnings and hours. Moreover, as people switch from agriculture they move to urban areas and shift from being self-employed to working for a wage.
The strategy recommends improving trade by investing in initiatives that enable businesses to compete favourably, grow and thrive; attract more foreign direct investment; implement policies that facilitate regional trade; promote urban development through investing in secondary cities; and incentivize commercial agriculture by encouraging collaboration across income-elastic value chains. The strategy also calls on government to realign youth employment programs to prepare graduates for semi-skilled work.
Agribusiness is particularly promising. Demand for food is rising, and as urbanization continues, and incomes rise, the demand for higher value produce; like meats, dairy produce, fresh vegetables, fresh fruits and juices will expand fast.
“Agribusiness and agro-processing can create many productive jobs in the food system, from transport, storage, and warehousing, to retail and restaurants. Blessed with good weather and soil, Uganda can be a food basket for Africa while closing the employment gap,” said Tony Thompson, World Bank Country Manager for Uganda.