Nearly half of young Ugandans stuck outside work

KAMPALA - Uganda has one of the youngest populations, which can be a gift or spell a crisis.

New labour market figures released ahead of International Labour Day on May 1, show a country rich in youthful energy but under mounting pressure to create jobs fast enough, fairly enough and at a scale large enough to match its population growth.

The figures were presented in a statement by Esther Davinia Anyakun, Minister of State for Labour, Employment and Industrial Relations, at the Uganda Media Centre on April 28.

Uganda’s population now stands at 45.9 million, according to the National Population and Housing Census 2024. More striking still, over 73 % of Ugandans are below the age of 30. That means nearly three out of every four people in the country are young.

For a nation with ambition that can be a powerful engine of growth. Young populations can drive consumption, innovation and labour supply, but only if economies generate opportunity.  

Without economic opportunities, youthfulness can become a source of frustration, exclusion and instability.

The labour ministry’s latest assessment suggests Uganda is standing at precisely that crossroads.

The working-age population is estimated at 26.4 million people, or 58.1% of the total population. Yet unemployment stands at about 12%, while labour force participation is just 43.2%. In simple terms, many Ugandans who could work are either unable to find jobs or are not fully integrated into the labour market.

The youth picture is sharper still. Among Ugandans aged 15 to 24, 42.6% are classified as NEET — not in employment, education or training. Nearly half of young people in that age bracket are therefore neither learning nor earning.

That statistic often signals something deeper than joblessness. It can mean delayed adulthood, dependency on relatives, social stress and lost productive years that are difficult to recover later.

Women face an additional burden. The minister notes that unemployment is higher among women than among men, highlighting persistent gender disparities in access to opportunities.

In practice, that may reflect barriers ranging from unpaid care work and early motherhood to discrimination, lower asset ownership and unequal access to training.

Then there is the structure of Uganda’s economy itself. The labour market remains overwhelmingly informal. The informal sector contributes about 54.5% of the Gross Domestic Product (GDP) and employs nearly 88% of the workforce.

That means most Ugandans work outside formal payroll systems, often without contracts, pensions, health cover or reliable labour protections.

For many households, informal work is not a choice. It is survival. Street vending, boda boda transport, market trade, small workshops, casual construction and family farming keep millions afloat.

However, such work can also mean unstable income, exposure to abuse and little protection in illness or old age.

Social protection remains thin. Although 3.2 million workers are registered under retirement benefits schemes, most through the National Social Security Fund, only a fraction is actively contributing.

That leaves many workers vulnerable once their earning years end.

The productivity challenge is equally sobering. Uganda’s real GDP per person employed stood at $6,162 (sh 22,900,000) in 2021 on a purchasing power parity basis.

That compares with $10,278 (sh 38,226, 600) for Sub-Saharan Africa and $41,510 (sh154,386,800) globally.

In everyday language, Ugandan workers produce significantly less economic value per worker than regional and global averages.

That matters because productivity often determines wages, competitiveness and long-term living standards. Low-productivity economies tend to struggle to generate well-paying jobs.

Yet the minister’s statement also points to progress. Uganda, she said, has expanded monetisation of the economy, reduced poverty and built stronger legal and policy frameworks for development.

Still, demographics rarely wait for policy. Every year, more young Ugandans enter adulthood seeking income, dignity and a place in the economy.

If enough jobs emerge, the country could harness what economists call a demographic dividend. If not, the same population surge could deepen unemployment and inequality.

This year’s Labour Day theme captures that urgency: “Safeguarding Uganda’s Progress: Empowering the Workforce and Promoting Decent Work for Competitive Enterprises.”