Over 9 million Ugandans trapped in inadequate employment as industry sheds jobs
UBOS Labour Market Survey puts the number of people experiencing labour underutilisation at 9,263,647, representing 44.3% of the population aged 15 and above. According to the findings, millions of people are engaged in work that does not adequately utilise their skills, time or potential.
According to the findings, millions of people are engaged in work that does not adequately utilise their skills, time or potential. (Credit: Magnific)
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About 9.2 million Ugandans are experiencing some form of labour underutilisation, according to the Uganda Bureau of Statistics Labour Market Survey for the first quarter of the 2026/2027 financial year.
UBOS Labour Market Survey puts the number of people experiencing labour underutilisation at 9,263,647, representing 44.3% of the population aged 15 and above.
According to the findings, millions of people are engaged in work that does not adequately utilise their skills, time or potential.
Although the survey estimates that 14.2 million people were employed, representing 88.3% of the labour force, 1.88 million, or 11.7%, were unemployed.
Dr Madina Guloba, an economist at the Economic Policy Research Centre (EPRC), said the figures reflect the realities of a labour market where having a job does not necessarily translate into adequate employment or meaningful economic participation.
She said some Ugandans are technically employed but are not fully engaged in productive activities, while others take on informal and temporary assignments simply to generate an income.
“Underemployment occurs when people work fewer hours than they are willing to work, or when they are underpaid relative to their perceived worth. A significant portion of Ugandans fall into these categories,” Guloba said on November 12th at the release of the report.
She further explained that some businesses increasingly rely on shift arrangements and partial-day engagements to manage payroll costs, meaning that the number of people classified as employed does not necessarily reflect the amount of work available.
Inequalities in employment access
The report also exposes significant inequalities in access to employment, particularly among women and young people.
Among people aged 14 to 64, labour underutilisation stood at 52% for women, compared with 36.7% for men. Women’s labour force participation was 48.5%, against 63.2% for men.
The situation is even more pronounced among young people aged 18 to 30, whose labour underutilisation rate stood at 47.4%. Young women recorded 57.2%, compared with 37.4% among young men.
In rural areas, youth labour underutilisation reached 50.2%, compared with 42.3% in urban areas. Among young women in rural areas, the rate climbed to 61.4%.
Education and jobs mismatch
Sector experts questioned whether the economy is creating jobs that match the qualifications and skills of graduates leaving universities and other tertiary institutions.
Stephen Asiimwe, the head of the Private Sector Foundation Uganda (PSFU), said the number of graduates entering the labour market has grown faster than the capacity of businesses, industries and government institutions to absorb them.
He attributed the mismatch partly to the expansion of higher education. Asiimwe said many graduates, including lawyers, accountants and social scientists, struggle to find jobs corresponding to their qualifications and are forced to take up lower-level positions or work outside their areas of training.
“We have over 3,000 lawyers coming out a year, and fewer law firms and companies taking them. So what do you do? You go and look for lower level jobs like front-desk operations and that would be for me a mismatch in terms of absorption,” he said.
He also pointed to growing demand for Ugandan workers in Middle Eastern countries, saying some employees are leaving local jobs to pursue employment opportunities abroad.
Vacancies remain unfilled
The UBOS survey revealed that while millions of Ugandans are struggling to find adequate work, formal establishments are reporting vacancies they cannot fill and businesses simultaneously shedding jobs.
Between April and June 2026, formal establishments created 38,036 jobs but lost 10,375, resulting in a net gain of 27,661 jobs.
However, industry recorded a net loss of approximately 1,236 jobs, having created 2,059 positions against 3,295 lost.
The services sector accounted for most of the employment growth, creating 34,518 jobs and recording a net gain of 28,606.
The survey further identified 84,347 vacancies in formal establishments, but only 51,101 were filled, leaving 33,246 positions, representing 39.4%, unfilled.
Agriculture recorded the lowest vacancy fill rate at 29%, compared with 75.9% in industry and 60% in services.
Guloba said the difficulties businesses face in filling positions must also be understood against the rising cost of doing business, which affects their ability to offer competitive remuneration and meet employment obligations.
The survey recorded 111,390 employee exits from formal establishments during the quarter. Resignations accounted for 57,708 exits, or 51.8%, while dismissal and termination accounted for 23,528, representing 21.1%.
A further 13,927 workers left after their contracts expired. Among the reasons employers cited for job destruction, restructuring and downsizing accounted for 39.8%, reduced demand for goods and services 23.1%, and financial constraints or cost-cutting 20.2%.
Asiimwe said some employees also leave because their qualifications and career expectations are not matched by the positions available to them.
He said dissatisfaction with employment opportunities, particularly among highly qualified workers, contributes to staff turnover, while opportunities abroad provide an alternative for those seeking better prospects.
Services sector offers employment opportunities
Despite the challenges in industry, Asiimwe said the services sector remains one of Uganda’s biggest opportunities for expanding employment because it cuts across almost every part of the economy.
He said expanding investment in these activities would create more opportunities for Ugandans, particularly if the country attracts more domestic and foreign investors.
“The more businesses that start, the more absorption in terms of service provision and by extension the jobs that will be created in the services,” Asiimwe said.
He urged government to strengthen the investment environment through appropriate tax policies, incentives and opportunities that encourage businesses to expand.
He identified tourism, mining and oil and gas as sectors whose development could stimulate additional employment.
The missing middle
Hakim Mulema, an economic policy analyst at HLM Ventures Limited, said technology is also changing the nature of work by automating some traditional jobs while creating demand for new skills.
He argued that the challenge is not simply to move people into formal employment but to improve productivity and gradually formalise the millions already participating in the informal economy.
He noted that government efforts to integrate systems, including through the use of the National Identification Number (NIN), provide opportunities to improve identification and access to formal economic services.