How to increase job creation in Uganda

Research question Uganda has registered minimal growth in formal employment despite registering impressive macroeconomic targets. Most firms are not growing and only a very small proportion of firms operate at a national scale. Why is employment in formal firms are not growing in Uganda Why have government interventions targeting job creation not yet achieved the desired outcomes.

Interventions targeting job creation Establishing economic infrastructure, Provision of tax and investment incentives Provision of vocational training Interest free loans to youth groups.

Methodology Report “Uganda’s Employment Challenge: An Evaluation of Government’s Strategy” Ministry of Finance and Economic Development Document reviews of policies targeting employment creation Analysis of surveys World Bank Enterprise Surveys, Uganda Business Register

Slow growth in firm employment and high mortality of firms

Sustained increase in job seekers

Infrastructure Inadequate physical infrastructure. The high cost of electricity is a significant constraint to firm growth. Uganda’s poor internal transport network limits competition between geographically distant firms, giving many incumbents local monopoly powers. As such, very few firms operate on a national scale and job growth has been concentrated along major transport corridors.

Inadequate supply of practical skills among the labour force. Skill-intensive manufacturing industries account for a disproportionately small share of formal manufacturing employment manufacture of apparel, machinery and equipment Firms in these sectors have expanded employment much slower than average. BTVET institutions are located in urban areas rural majority are often unaware of the courses available students find it too costly to access the training services

Recommendations Increase spending on infrastructure to ease constraints to firm growth. Expand fiscal deficit Expand access to BTVET through the use of private providers of business, technical and vocational training. Structural transformation must be enhanced in the agricultural sector through integration of smallholder farmers into larger value chains.