RESEARCH ISSUE NO.

REVIEWING YOUTH UNEMPLOYMENT IN

UGANDA FOR SOCIAL AND ECONOMIC
TRANSFORMATION

BY
CHARLES NATUHAMYA
MAY 2018
i
 RESEARCH SERIES NO.I

REVIEWING YOUTH UNEMPLOYMENT IN

UGANDA FOR SOCIAL AND ECONOMIC
TRANSFORMATION

BY
CHARLES NATUHAMYA
MAY 2018
ii
Copyright © Success Africa
Success Africa is a human capital development and empowerment firm committed to equipping
individuals and organizations with peak performance tools and skills so they can become
successful. We have conducted successful training's for corporate, governmental and non-
governmental organizations, and senior executives. Our vision is to be a renowned market leader
in the empowerment and transformation of people and organizations across Africa. Over the
years, we have designed programmes that help the youths to bring out their best potential no
matter the challenges they are facing.

Disclaimer: The views expressed in this publication are those of the author and do not necessarily
represent the views of Success Africa or its management.
Any enquiries can be addressed in writing to the Chief Executive Officer on the following
address:
Success Africa
Impala House Kimathi Avenue
P.O. Box 23695, Kampala, Uganda
Tel: +256-393-217014
Email: info@success-africa.com
Web: www.success-africa.com

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Acknowledgement
While conducting this review study, priceless contribution was given to me by Success Africa
team. Therefore I would like to extent my most sincere gratitude and acknowledge their
immense contribution to this review.

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Table of contents

Acknowledgement ....................................................................................................................................... iv
Table of contents .......................................................................................................................................... v
Abstract ........................................................................................................................................................ vi
Introduction .................................................................................................................................................. 1
Youth Unemployment Overview .................................................................................................................. 2
Challenges of Youth Unemployment In Uganda ........................................................................................... 4
Interventions Made ...................................................................................................................................... 5
Recommendations ........................................................................................................................................ 7
Reference ...................................................................................................................................................... 8

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Abstract
Unemployment is sighted as one of the biggest challenges in Uganda, and the biggest among the
youths in Uganda. Though most researchers have attempted to expose this issue, the findings
published don’t usually reflect the exact situation on ground. In this paper, I review literature on
the big picture of youth unemployment, youth unemployment challenges, some of the
interventions that have been made and recommendations. The main objective of this paper is to
highlight the biggest challenges in the established literature already in existence. The main
challenge was identified as the low absorption level of university graduates added in the labour
market every year.

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Introduction
The national youth policy defines youth as all young persons, female and male, aged 12 to 30
years. Uganda has the second largest percentage of young people in the whole world, with a
median age of 15.9. The National Population and Household Census (UBOS, 2014) found that
staggering 78 % of the population is below 30 years old.

Overall, about 71% of the youth have post-primary level of education. Only 18.4% of the youth
have primary level of education. 39.6% of the youth have post-secondary level of education.
Uganda has nearly achieved gender parity at all levels of education; from primary through
university. However, there are 10% more women enrolled in primary and university compared to
men.

Unemployment among youth is about 52%. At 62%, unemployment is highest among rural
women. 22% of the youth were reported to be self-employed while 26% are in formal
employment. There is a strong positive correlation between level of education and labor
participation. Hence, labor participation rates are generally higher among youth with university
level of education. Labor participation rates (formal employment and self-employment) are
highest among youth with post-graduate education. Self-employment rates are lowest among
youth with university level education. Youth aged between 18 and 25 are on average twice more
likely to be unemployed compared to those aged between 26 and 35. Unemployment rates in
rural areas are 33% higher compared to urban areas.

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Youth Unemployment Overview
Uganda has one of the world’s youngest population with over 78 percent of its population below
the age of 30. With just under eight million youth aged 15-30, the country also has one of the
highest youth unemployment rates in Sub-Saharan Africa. Although Uganda is making strides
economically, it faces significant challenges in meeting its young people’s needs today and their
challenges tomorrow as its population continues to grow at a rate of 3.2 percent annually.

According to the 2014, National Housing and Population Census, the youth form a large
proportion of the population, 23% are in the age bracket of 18-30, while 55% are below the age
of 18 years. The 65% of youth in the age bracket of 20-24 are unemployed, while 90% of those
above 25 years are either unemployed or underemployed. This means their contribution to
national production is marginal.

Figure1: Employment/Unemployment Versus Age Groups

100
90
Employement/Unemployement %

80
70
60
50
40
30
20
10
0
20-24 Above 25
Age groups

Employed Unemployed/Underemployed

Youth unemployment rate remains high at 11.1% in Uganda and it is higher than the national
average unemployment rate of 9.4%. It is higher among females than males; the proportion of
female youth of working age who are unemployed (13.7%) is higher than that of male

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unemployed youth (8.9%) (UNDP, 2015). According to EPRC (2015), 13 percent of youth aged 15
– 29 years are unemployed while 63 percent are underemployed.

It is estimated that more than 40,000 young people graduate from Ugandan universities each
year. Yet the market can provide only 8,000 jobs annually. The International Labour Organisation
(ILO) says training institutions continue to produce graduates whose skills do not match what the
market wants. This mismatch makes it harder to tackle youth unemployment. "As much as two-
thirds of the young population is under-utilised in some developing economies, meaning they
are unemployed, in irregular employment – most likely in the informal sector – or neither in the
labour force nor in education or training," says the ILO report Global Employment Trends for
Youth 2013 – A Generation at Risk.

Figure 2: Percentages of Absorbed and Unabsorbed Youths In The Labour Market Annually

17%

Absorbed
Unadsorbed

83%

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Challenges of Youth Unemployment In Uganda
Uganda has one of the fastest growing and youngest population in the world. While this can be a
good basis for economic growth, it also poses an immense challenge to the country in the form
of widespread youth unemployment, which can threaten the political stability and the
sustainable development of the pearl of Africa.

Statistics show that the youth face higher unemployment rates than adults, and that women
face higher rates than men. Hence, young women face a double burden by being both youth and
female. Young women often find themselves trapped in the middle between the expectations
culture and society has of them as women, and their own aspirations.

Youth unemployment in Uganda is the highest in Africa. A recent study, Lost opportunity - Gaps
in youth policy and programming in Uganda, published by Action Aid, put youth unemployment
at 62%, although the African Development Bank says it could be as high as 83%.

According to State of Uganda population report 2017, access to sexual and reproductive health
information and services are of specific importance to economic benefit – as it allows girls to
prevent unplanned pregnancy, stay in school and participate in gainful employment. Information
from this publication indicates that, over 70 percent of the unskilled youths and in “vulnerable
employment” live in rural areas – these should be at the heart of all our socioeconomic
transformation interventions – in sectors such as agriculture which have the multiplier job
effects.

Uganda‘s youthful population is majorly unskilled or semi - skilled and as well not financially
empowered. In the short run, this leads to low participation of Ugandan nationals in the market
economy. In addition, the few Ugandans who are engaged in the market economy are
concentrated mainly in small, informal businesses majorly vending products that foreigners
produce.

As Uganda pursues the vision of getting into the middle income category, youth unemployment
has remained a major challenge for the country. Providing employment opportunities to the
youth is paramount for the country’s economic transformation. A critical mass of youth require

4
employment to increase their incomes and better their standards of living. Youth unemployment
or vulnerable employment is always likely to reduce the future productive potential and earnings
of the people. Unemployment leaves them with limited incomes, and unable to access good
health and education services (ADB, 2017). For the youth to be sustainably employed, they need
to be empowered through skills development.

Interventions Made
Uganda’s population increased from 16.7 million people in 1990 to 34.6 million in 2014 and it is
projected to reach about 40 million by mid-2018. Most of this population is young and about half
of it is under the age of 15 years. Such a young population poses both opportunities and
challenges for development.

According to State of Uganda Population Report 2017, the Government of Uganda is fully aware
of the above challenges and is prioritizing skilling of young population so that they could fulfill
the demand for skilled workers in the country. In order to harness the demographic dividend,
Uganda has identified three (3) areas of focus:- i) creating opportunities and skills development
by focusing on training the youth, ii) review education system and making vocational education a
national priority and iii) imparting market-relevant skills and creating an innovative and
entrepreneurial workforce.

In order to address the above anomalies, Government has put emphasis on promoting skills
development, including through promotion of Business, Technical and Vocational Education
Training (BTVET) among others. The legal and institutional frameworks in that regard have been
upgraded to support skills training and development. The BTVET Act of 2008 and the skilling
Uganda–BTVET Strategic Plan for FY 2012/13 – 2021/22 are among major instruments in place
focusing on skills development to address the high unemployment rates among the youth.

It is highly recognised that investing substantial resources towards skills acquisition especially
through vocational training is vital in accelerating human development and entrepreneurship
development (ADB, 2017). In 2016, the World Bank (WB) approved a US$100 million credit to
the Government of Uganda for the implementation of the Uganda Skills Development Project

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(USDP). The main objective of the project is to enhance the capacity of institutions to deliver
high quality and demand driven training programs in key sectors such as agriculture,
construction and manufacturing sectors.

However, the range of occupations for which Ugandan Business, Technical and Vocational
Education and Training programmes are offered is rather narrow, and does not address skills
needs in modern and emerging productive sectors. Available studies and labour market
indicators point to unmet skills demand in the hospitality industry, ICT sector, business
management and financial sector, mining and engineering, oil and gas, and for environmental
technologies, among others. A major challenge across the system is the lack of practical
competencies of graduates. According to employer surveys, this is especially pronounced at
higher qualification levels indicating the need for considerably more practically-oriented
Ugandan Business, Technical and Vocational Education and Training at technician level.

Uganda has since used the adoption of liberalization as a development strategy in the early
1990s provided a conducive environment for the private sector to take leadership in the
economy. This is due to the fact that across the globe, Micro, Small and Medium sized
Enterprises (MSMEs) are highly associated with considerable employment opportunities for the
youth.

It is widely acknowledged that Ugandans have high aspirations and positive attitudes towards
entrepreneurship (GEM, 2016). As a result, a large share of the active labour force, representing
about 35.5% is engaged in entrepreneurship. The entrepreneurship levels in Uganda are highly
concentrated in small and micro businesses, with about 2% of businesses expecting to employ 20
or more people in about five years. About 60% of the MSMEs operating business aged between
1 and 5 years are either sole proprietorships or partnership, which implies that at least one in
every three people in the country is engaged in some kind of entrepreneurial activity (MTIC,
2015).

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Recommendations

Today there are over 20 million young people in Uganda. Young people aged 18 years and below
constitute (54 percent) of the total population. This youthful population is Uganda’s greatest
resource. If properly nurtured and supported, the youth will positively contribute to Uganda’s
socio-economic development.

Youth have the ambition and motivation to adopt new technologies, explore knowledge and
build a carrier. A specialized fund in the line of the youth livelihood fund or any related
programme should be put in place as stimulus to support youth who choose to engage in specific
priority export based production. Such support should focus on facilitating youth to invest in
agriculture through tailored skills and apprenticeship or incubation programmes, input credit
financing and acquisition of farm management technology.

Since the majority of the youth live in rural areas and are employed in agriculture, efforts should
be geared towards enhancing agricultural production and productivity so as to transform the
sector from the subsistence to commercialized agriculture.

Also, like other countries, Uganda should review its policy concerning International companies or
investors that set up in the country so that they employ a specific percentage of Ugandans as a
policy in all positions including management.

With the low absorption level of graduates in the country, about 17 percent, the government
and other stakeholders should identify and remove barrier stopping the graduate youth from
setting up their own ventures or being self-employed. One of the major barriers is rent as part of
capital. This can be solved by providing rent free workspaces for a specified period of time to the
youth with innovations to meet up with their clients.

If Uganda is to track the NDPII Theme; “Strengthening Uganda’s Competitiveness for Sustainable
Wealth Creation, Employment and Inclusive Growth”, youth unemployment should be tackled
immediately.

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Reference

ADB (2017). The Competitiveness Report 2017 - African Development Bank

GEM (2016). Global Entrepreneurship Monitor Report 2015/2016

State of Uganda Population Report 2017

The Uganda Youth Survey Report – Aga Khan University

UBOS (2014). The National Population and Household Census

UNDP (2015). Uganda - Human Development Reports - United Nations Development Programme