Dr. Enock Kibuuka

EDITOR: At first glance when someone reads the title of this article he/she might think that the author is sick of psychosis. In other words, it is ironic and potentially offensive to tell the so many desperate and frustrated jobless graduates that their disorienting situation is a sign that the country is growing.

Whatever the accusation and lambasting that might come with such an article, this is part of the cost that we scholars pay. First, there are three fundamental concepts we must understand. First, is unemployment, which simply means that someone does not have a job yet he/she is actively searching for one and ready to work under the prevailing pecuniary and non-pecuniary conditions pertaining to that job.

Second, the term economic growth from a macroeconomic perspective means a steady increase in the productive capacity of a country’s economy which brings about high levels of national output and national income reflected in the increase in gross domestic product (GDP). Uganda’s economic outlook is all promising.

According to the Ministry of Finance Planning and Economic Development (MoFPED), Budget Speech for the Financial Year 2023/24, Uganda’s economy was reported to have grown at an average of 5.5% in 2023; inflation slightly above target at 6.2%; Foreign Direct Investment (FDI) inflows increasing to record high at US$ 1.5 Billion, Gross Domestic Product (GDP) per capita increasing by 8.9 percent from 957 USD in 2020/21 to 1,042 USD in the financial year 2021/22; and foreign remittances reaching record levels at US$ 1.3 billion by April, 2023. 

Paradoxically, youth unemployment particularly university graduate unemployment remains an overarching phenomenon in Uganda. The question that we must interrogate is if the economy is growing with more FDIs flowing into the country, then why the alarming graduate unemployment? The answer is not ordinary. Rather, it is technical and that is exactly the essence of my article. As Uganda continues to be a favourable investment destination for investors means that industry is expanding and the productive capacity (GDP) of the country is increasing (economic growth). Here the word industry is used in a broader sense to include all fields of formal workplaces namely; private sector, government, Non-Government Organizations (NGOs), charities and cultural institutions.

At the same time, higher education institutions, particularly universities are producing more graduates with degrees coinciding with a high level of graduate unemployment in the country. This is what I refer to as academic inflation, which means a situation of co-existence of high university graduation levels and high unemployment levels of graduates. In technical terms, this is called credential inflation, which refers to an inverse relationship between the number of people with academic bachelor’s degrees and the jobs for which they qualify. This is the real perfect storm that most of the unemployed graduates in Uganda are facing.

With the increase in FDI inflows, the num­ber of newly created jobs also increases. One major feature of most of these FDIs including multinational corporations (MNCs) is that their production or service processes are hyper-specialized and high knowledge-intensive. With technological developments and the increasing tendency of FDIs to target large-scale investments, many of the bachelor's degree holders find it hard to secure gainful employment in these MNCs due to knowledge and skills deficiency. Following the economics of education imperatives, particularly higher education, people with higher qualifications receive more and higher returns to investments in their education. These returns are referred to as socio-economic and private-public returns to investment in education.

Thus as the difference in earnings between highly educated and less educated individuals keeps widening, and as the private socio-economic returns to investment in higher education keep growing, the occupational value of a bachelor’s degree significantly reduces. In other words, because of the hyper-specialization and knowledge intensity of FDIs, the demand for a bachelor's degree qualification significantly reduces, which is why most bachelor's degree holders find it so hard to secure gainful employment. Because of low and stagnating returns to investment in bachelor’s degrees, and realizing that higher academic qualifications accrue higher returns to investment, many bachelor’s degree holders seek for postgraduate education hoping that higher academic qualifications will reduce their lack of employable skills and competencies and thus secure productive and high-paying jobs after the completion of postgraduate studies.

This is because most enterprises, MNCs and large NGOs give more preference to higher degrees than lower academic qualifications. Let me write somewhat figuratively. Imagine when you were still young, the sizes of shoes and clothes you used to wear inevitably increase as you grow up or as you gain more body weight mass. Likewise, as the economy grows with more complex investment technologies and production processes, more complex or technical knowledge capabilities, skills, competencies and attributes are required and thus lower academic qualifications such as bachelor’s degrees become increasingly undesired because they don’t prepare students to gain those complex and technical knowledge capabilities, skills, and competencies.

Then one might pose a question, why don’t universities train these bachelor degree holders to have the knowledge, skills, and competencies required by these MNCs and enterprises? The answer is simple but somewhat bitter. According to international standards to which universities subscribe, a bachelor’s degree is not designed to prepare someone for employment. The aim of a bachelor’s degree is to introduce someone to the ecology and landscape of a given professional field, not to have a broader and comprehensive understanding of the landscape. For instance, take the example of a Medical school. You do your general degree in Medicine and Surgery for five years. At the end of the five years, you graduate with a Bachelor of Medicine and Bachelor of Surgery (MBCh.B) degree.

However, even with that MBCh.B, someone is a cardiologist, urologist, gynaecologist, oncologist, neurosurgeon, paediatrician, ENT specialist, etc. But you have some basic knowledge about the human anatomy, and nervous system, and can provide basic treatment to patients with non-complex illnesses such as malaria. In other countries, a bachelor’s degree is called an introductory degree, in other places it is called a basic degree, in other places it is called a general or foundational degree. Here in Africa, we call it a bachelor’s degree. Either way, it has the same purpose. In fact, in Europe, the United States of America (USA), Nordic countries (Sweden, Finland, etc.) and China, almost it is by law that a bachelor’s degree holder cannot be employed.

When someone completes their foundational (bachelor’s) degree, that person is placed for internship for between one year to two years, then enrols for a Professional degree or what we call a master’s degree which now equips him/her with the requisite knowledge, skills, competencies, and attributes needed for the job market. Then this person is employable. Thus, the third concept that we need to understand is unemployability, which means that an individual lacks the requisite knowledge, skills, capabilities, competencies and skills needed to perform a particular job task in order to yield the expected goals and outcomes. This is what is currently happening in Uganda when most people report there is a mismatch between the quality of graduates and the skills and competencies needed by the labour market. It is because these graduates just possess basic skills and competencies yet the labour market requires more advanced knowledge, skills, capabilities and competencies because the economy is growing. So these bachelor’s degree holders are not supposed to be employed in the first place, which is why for those who are employed, their economic returns (wages and salaries) are too low compared to those with masters’ degrees.

Lastly, one might what explains the unemployment of some people with master’s degrees or even PhDs? I don’t have enough space to elucidate on this. However, it is worth noting that beyond academic credentials the problem of graduate unemployment is a reflection of deep-seated social, political and economic challenges in the country. Issues such as poor leadership and governance, bad politics, corruption and lack of accountability, the small size of the economy that cannot absorb all qualified people, etc. can contribute. The beauty is such people are employable but bachelor’s degree holders are not. 

The writer is an education policy consultant and lecturer, Kyambogo University