Uganda launches job creation strategy

Uganda’s population is growing at a high rate, outmatching annual jobs created in the economy. This calls for structural and policy changes to support job creation initiatives.

The Government rolled out a number of initiatives to foster employment creation, especially through entrepreneurship and provision of practical skills, to improve chances of employability by individuals.

Programmes to skill the labour force and equip the citizens with market relevant and practical skills is done through support for entrepreneurship through Youth Livelihood Programme. Also, the Uganda Women Entrepreneurship Fund and artisanal funding, Operation Wealth Creation (OWC), setting up of industrial parks across the country, as well as promotion of commercial farming and agroprocessing seek to widen jobs.

The Uganda Bureau of Standards (UBOS) estimates Uganda’s population at over 42.1 million people and projects it to grow to 47 million people by 2025.

“The rise in population will require the country to create three times as many jobs annually in the next generation,” the World Bank noted in a report. Uganda: Jobs Strategy for Inclusive Growth, study released early this year, shows that while the number of qualified jobseekers is high due to improved access to education.

EMYOOGA PROJECT

The sh165.7b ‘Emyooga’ programme that is targeting selected enterprises in the informal sector is another initiative by the government to boost jobs and savings among the youth. Under the plan launched in July, benefi ciaries in each constituency will get sh560m, apart from Wakiso that will be given sh4.4b for its eight constituencies.

The Minister of State for Microfi nance, Haruna Kasolo, said the money will be used as seed capital within the formed SACCOS, adding that the scheme will create jobs through specialised categories at constituency levels.

To access the funds, benefi ciaries must fi rst to form SACCOS of between seven and 30 members, he added. Each SACCOS will receive money ranging from sh5m and sh30 million. The government is targeting the informal sector such as bodaboda riders, carpenters, tailors, welders, fi shermen, taxis, vendors and salon operators. Others are journalists, market vendors, veterans, produce dealers and Persons with Disabilities (PWDs).

The demand for skilled and highly productive workers remains low in the country. It adds that the jobs created are narrowing on the back of slowdown in economic growth (about 3% in quarter one of 2020) and increased poverty levels, with over 10 million Uganda categorised as poor as per 2017 data. 
 
ENTREPRENEURSHIP FOR JOB CREATION

The Youth Livelihood and the Uganda Women Entrepreneurship funds are other avenues through which the Government is supporting young people to create their own jobs through self-employment by giving them soft loans to start or expand businesses and employ other youth.

The beneficiaries pay no interest for repayments made within the first 12 months and one does not need collateral to get a loan. The money, channelled through organised groups in the youth and women council structures, has interest rate of only 5% per annum for repayments made after the initial 12 months.

The schemes also provide flexible repayment periods of up to three years, depending on the project and there are no administrative charges on applications.

INDUSTRIAL PARKS

Uganda is promoting development of industrial parks and business zones to drive job creation and spur growth across the country.

According to the Uganda Investment Authority (UIA), the parks will help to industrialise Uganda, create jobs and contribute to national development.

So far, UIA is targeting to develop 27 industrial parks countrywide, including five science and innovation parks, with the Kampala Industrial and Business Park Namanve already boasting of many fully operational industries. Other industrial parks under development are Moroto, Kasese and Mbarara.

Planned industrial parks are Hoima, Nakasongola, Buliisa, Gulu, Lira, Arua, Tororo, Iganga, Masaka, LuweeroNakaseke, Bushenyi, Kabale, Fort Portal, Rakai, Mbarara, Mityana and Mubende. 

According to UIA, over 23,000 people are employed in the Kampala Industrial and Business Park, and the figure is expected to rise to 200,000 jobs at full operational capacity. 

FUNDING SACCOS

In a related initiative, the government funds and encourages artisans to form co-operatives and work from a central place where they can access facilities like power and equipment. This way, more people will join the workforce thanks to the enabling environment in these group work facilities, experts say.

This initiative has already benefited many groups, especially those involved in making furniture, metal fabrication and hairdressers. SACCOS for interest groups like youth, people with disabilities (PWDs) and women, use seed capital from the government to lend to members.

They are deepening the push for employment creation in the country. The SACCOS are also promoting and mobilising savings, enabling members to invest and create jobs for themselves and other Ugandans, says Rashid Rugumayo, a credit officer at Ibanda Youth Entrepreneurs SACCOS.
 
OWC FOSTERING JOB CREATION

According to Ibanda district coordinator for Operation Wealth Creation (OWC) Lt. Joseph Bataringaya, interventions by the government through OWC are supporting residents to create self-employment and also hire others.

He said the Government donated milling equipment to selected coffee farmer cooperatives in the district while dairy farmers got milk coolers and tractors to use in growing pastures, efforts geared at value addition and job-creation.

He said the 30 coffee processors in the district are supported to get markets, adding that they employ hundreds of people directly and directly along the coffee value chain.

“We also donate improved seeds and animal breeds, dayold chicks and feeds to farmers, which creates jobs as most of the beneficiaries are starting these projects on commercial basis for the first time,” explained Bataringaya.

This gives jobs to residents through participation in the agriculture values chains, especially buying planting materials and livestock to donate to farmers, he adds.

He also said OWC encourages youth and residents in towns and communities along the main road to engage in handicraft making targeting travellers to boost household earnings and jobs. 

Carpenters at work. The Emyooga project targets the informal sector such as bodaboda riders, carpenters, tailors, welders and vendorS

The Youth Apprenticeship Programme (YAP), an initiative of Uganda Investment Authority aimed at solving youth unemployment problem in Uganda, is one of the unique solutions targeting unemployed graduates.

The programme prepares educated youth for the option of self-employment by equipping them with necessary skills and knowledge to become service providers.  Information on the authority’s website indicates that the apprentices are trained in basic business administration tools and skills, including record keeping, stock records, customer services and sales and marketing to provide basic support in business management and support to small-and-medium businesses (SMEs).

“After which, the apprentices are deployed as volunteers to help micro, small businesses that don’t have a formal process for keeping business records,” the authority adds.

The target beneficiaries include businesses like market vendors, salons, shops, kiosks, restaurants, carpentry and metal works, among others. Besides setting up simple record-keeping systems, the volunteers provide the SMEs weekly business records, enabling them to analyse the profitability of their businesses in real time.

The programme seeks to ease the growing joblessness among youth people. It offers a mutually beneficial partnership that will improve the employability of and provide skills to the unemployed youth by offering opportunity to work (through volunteering) with the micro and small business, adds UIA.

YAP mainly targets fresh university graduates. Upon satisfactory delivery of the pilot trials the programme can be upgraded for a small fee, according to UIA.
 
YOUTHFUL COUNTRY

Uganda is the world’s second youngest country with a median age of just 15.9. The country churns out about 800,000 young people reaching working age every year and will continue to rise to around a million on average in the next 10 years. This means there are fewer jobs available for the country’s young and growing population.

While nearly eight in 10 workingage Ugandans are employed, the low quality of jobs and the fast pace at which people are joining the workforce annually requires faster economic growth and higher productivity jobs to drive economic transformation, according to the study.

Currently, 77% of the population aged between 15 and 64 years are employed, and while the unemployment rate is low at 
3.2%, one in four is in wage employment. 
 
CHALLENGES

Some of the challenges identified by the report include high growth rate of labour force; access to jobs is deteriorating; poor quality of jobs; slow shift from subsistence agriculture; slow urbanisation despite high population growth; demand for wage workers by private sector is limited, while most of the enterprises are SMEs, and slowing growth of the economy, among others.

Some of the workers assembling phones at SIMI Mobile in Namanve Industrial Park

As fertility rates come down, if Uganda can create enough jobs with higher labour productivity for young workers, the country can take advantage of the “demographic dividend for economic growth,” says the World Bank.

Secondly, Uganda has a small window in which to trigger a labour-intensive economic transformation based on tradeable goods and services, before oil production begins. Success in creating more waged jobs for young Ugandans would generate a growth dividend.

Failure could lead to frustration among youth and challenge social stability. The lender recommends coordination of Government policy and investments to create jobs and transform the economy for young workers. Policies and investments should facilitate regional trade, encourage private investment, promote urban development, and give commercial agriculture incentives by encouraging value chain linkages.

The government should realign youth employment programmes to prepare graduates for semiskilled waged work in addition to entrepreneur