Characteristics of Uganda’s Labour Market

During the past few decades, Uganda has made relatively good steps towards macroeconomic growth. However, this growth has not transformed the labour market in terms of its structure. In the last decade, it was noted that there had been improvements in the rate of formal employment from both the public and private sectors at a yearly average of 5.1% which was considered above most of the other African countries grappling with the employment challenge. This percentage however still remains way below in regard to the labour force in formal employment.

Growth in economy is usually characterized by a rise in the advancement of technology which then becomes an integral part of development due to the fact that it becomes integrated with highly valued services and goods in sectors such as telecommunications, real estate development, large-scale agriculture, manufacturing and the very critical financial sector services. The inception of technology into service delivery and production goods means that a few numbers of people are tasked with the completion of bulk activities. As a result, the majority of new formal employment opportunities created are usually found in the comparatively lower production sectors in local commerce and subsistence agriculture.

The employment system in Uganda is divided into two broad sectors namely the private and the public. While it is the government that develops policy and regulations regarding

employment, it is the private sector that employs majority of people in Uganda. The private sector can further be divided into institution and self-employment. All these sectors have employment criteria’s that have similarities and differences. They are also surrounded by numerous challenges that then explains why many people are unemployed.

In the public sector, the government employment policy in Uganda is divided into those who are employed permanently and therefore under a national pension scheme while there are others who are employed under contract for a specified period or project. The recruitment method is supposed to be on merit, free and fair as well as open to public scrutiny. The police, military and the teachers service are some of the largest employers in the government Some of the biggest challenges in achieving this goal include, corruption, nepotism and political interference. In the private sector, employment is sometimes permanent without pension but mostly on contract. Some of the main employers include NGOs, media house, sports organisations and civil society. A much bigger percentage of Ugandans are self -employed operating small and medium enterprises. The agriculture sector is the leading employer of people who are self-employed since most people own inherited land.

With the increasingly better technological advancements that provide for tailor-made or specific service delivery, the labour force involved in the subsistence or low agricultural production has been steadily increasing with the years. The labour force in 2012/13 for instance, 72% was engaged in either forestry, fishing or agricultural; an increase from 69% observed during the same period in 2009/2010. This was a reflection of the increasingly attractive subsistence agriculture driven by the increase in food prices. The agricultural output surprisingly only managed to increase by a paltry 1.2% annually for the next 3 consecutive years starting from 2012/13 despite the agricultural sector experiencing 6.0% increase in its rate of employment. This clearly indicated a decrease in general productivity. The emphasis made by these statistics on a wider perspective is that the rate of employment increased in the in the lower -productivity sectors such as farming while the higher output sector contracted more in terms of absorbing the labour force. It should be noted that the high-value activities are also the major front-runners in driving economic growth. Indeed, the structural changes made in the labour market yielded very little in as far as significantly contributing to growing the economy (National Housing Survey of Uganda, 2012/13).

Ugandan labour market has been characterized by mismatches between labour demand and supply due to demographic changes. Half of the existing labour force is constituted by employees who fall below 30 years. Half of the general population also fall under the age of 24 years. This means that the entrance to the labour market also increases rapidly.

Rates of labour force grew constantly for 3 years at 4.8%. This rate was below the growth of formal employment during the same period of time. This scenario has created a very complex and difficult situation especially the youthful population who find it very difficult if not impossible to transcend into wage employment. Urbanization has also had an impact because currently, the labor force is being urbanized with most people moving from rural to urban centres. Between 2009 and 2013 the rate of urbanization increased from by 8% from the previous 15% to 23% and this is attributed to the expansion of local towns. The force that moves from the rural to urban centers ends up being absorbed in the informal sector with 62% either working as a self-employed or for their families or relatives, (Byamugisha, Shamchiyeva, & Kizu 2014:22-28).

Unemployment among the skilled or trained labour force is relatively low but increasing steadily. In the present day Ugandan labour force market, the youth are more likely not to get unemployment as compared to the older generations. The irony of it all is that while considering the difference in levels of education, the more-educated are significantly more unlikely to be unemployed especially women. In 2009/2010, 73% of university graduates were absorbed in various graduate-level jobs before this declined to a lower rate of 53% in 2012/13(Byamugisha, Shamchiyeva, & Kizu 2014:22-28).

The labour force of the Ugandan economy is characterized by underemployment, especially in the dominant sector of agriculture. In 2012/13, an estimated 8.9% of the labour force was pointed out as time-related underemployed with a majority of the people working for less than 40 hours in a week. Most are not willing to work for longer hours because the earnings from their labour input are very minimal and as such, they have to supplement with other economic activities. However, the labour force engaged in household enterprises outside the agricultural sector do work for longer hours. The growth in this sector over the last two decades has significantly helped minimize underemployment and has supplemented the little household incomes from subsistence agriculture, (Byamugisha, Shamchiyeva,& Kizu 2014:22-28).

Uganda has a wide margin of groups participating in the labour force market that includes a massive 84% margin of working-age group, several children and elderly members of the society, are active economically. The youthful population is staying much longer in the education system in an attempt to attain some competitiveness once they graduate from the school system and put venture into the career world. This is also the exclusive group whose majority of members choose not to work and rather concentrate on their studies. The other members of this group may be economically active.