The Privatisation process has been hailed as a big success and for being the main force behind Uganda’s striking economic growth figures. Privatisation, we are told increases economic growth, reduces poverty especially by increasing employment opportunities.
However, Economics experts from the Social Development Sector (SDS) from different government departments especially the Ministry of Gender, Labour and Social Development have expressed concern that the economic growth averaging more than 6% over the past decade has not
generated the expected job creation and has therefore not helped many people get out of poverty.
FAO World poverty map
This, they say is mainly because the majority of the poor derive their main income from wage employment and hence wage income is the critical determinant of their living conditions.
SDS experts from the Ministry of Gender, Labour and Social Development say that Uganda’s economic improvement may
have been spurred only by productivity gains without having any effect on creating jobs as expected.
“According to Uganda Investment Authority records, 1 job has been realised for every 2 jobs projected. Employment projections today stand at some 210,000 jobs, suggesting that just over 100,000 jobs have been created through new investments on a cumulative basis since 1990,” reads their report.
This means that almost 22 years on, new investments have not yet even offset the 150,000 jobs the Civil Service
retrenchment created in 1988.
“Such job losses amidst low levels of employment tends to lend credence to the possibility that Uganda’s economic growth could be a phenomenon of job-loss growth, and therefore exclusive and inequitable,” reads the report, a result of sector discussions.
The Uganda Bureau of Statistics Report (UBOS) in the 2001/02 Business Register also indicates that only 3.6% of the economically active population are employed by the private sector, where the private sector is defined as formal or informal business operating from fixed premises.
Only 29% of these workers are female, and only 5.2% of them are employed in Northern Uganda, with the bulk of the employment, 63.4%, occurring in the Central Region.
This show there is regional inequality in employment. The experts say that’s why income inequalities have remained large and unchanged in spite of the high economic growth rates (averaging 6%) registered by Uganda.
Also, one has to note that the bulk of the Ugandan labour force is engaged in informal employment activities. According to the Uganda Business Register, 2001/2002, of the 160,000 enterprises (excluding defence and administration) employing 440,000 people, 87% are informal, employing less than 5 people, mostly less than 2 persons.
Employment creation has been described as a top priority for the country to exit poverty. Indeed, of the 12 factors identified by 19 communities as responsible for moving people out of poverty, the most stressed in the Uganda Participatory Poverty
Assessment studies has been employment and availability of opportunities while the other factors identified relate to inaccessibility to productive assets like land, education, capital which are key determinants to self-employment
“The low levels of wage as opposed to self employment opportunities vis-à-vis the growing labour force has been identified as a major social and economic problem which has contributed to persistent poverty in Uganda. Employment, by providing people with access to wages, therefore constitutes one of the most important forces in improving economic equity. Without sufficient growth in employment opportunities, the ability of an economy to eradicate poverty and inequality can be
severely compromised.”
The report says that in order to achieve the broader objectives of the PEAP which was converted into the National Development Plan, it is important to support mechanisms being formulated by the SDS to widen access for wage employment as opposed to self-employment.
“Government also needs to implement strategies focusing on uplifting wages and conditions at the lower end of wage employment,” it reads.
Unless arrested, the situation is likely to worsen, the experts say. Because at over 11.3 million and growing at 3.4% per annum, Uganda’s labour force is adding approximately 380,000 new entrants to the labour market, most of them young, illiterate and unskilled.
The report also expresses concern over the pool of the illiterate and unskilled population that is still expanding at “a high rate in spite of the UPE and USE programmes, all of which are not being helped by the privatisation process.
“It is clear from the cross-country data that these dropouts from school will remain largely unemployed since the lower the level of education the higher the rate of unemployment.”
But researchers recently released another report further complicating this analysis, showing that the increasing number of graduates inUganda is increasing unemployment and poverty.
Two Professors, David Krybill of Ohio State University in the USA and Barnabas Kiiza from Makerere University have said that the increased number of students completing university level of education is increasing poverty in Uganda.
The professors who last year presented a paper on poverty at Parliament said that while the increase in pupil’s finishing primary substantially reduced poverty levels in communities, increased number of university graduates is increasing poverty.
They say that this is because many graduates have a high level of consumption yet they may not be employed
to pay for their needs. The professors who are carrying out a survey on poverty levels in Uganda advised that government to put more emphasis on primary and secondary education.
They also told Parliament that their survey shows that any additional child a woman produces in Uganda intensifies poverty by 11 percent.
In their interim report-explaining poverty in Uganda, the professors note with concern that while the world looks forward for a decline in poverty levels by 15 percent come 2015 especially in China and India, poverty in Africa and Uganda in particular is expected to increase.
The analysis is backed by the facts in the 2004 statistics from the Uganda Bureau of statistics, which show that poverty in Uganda has been increasing since the year 2000.
The Bureau of statistics indicates that National poverty levels increased from 33.8 percent in the period 1999/2000 to 37.7 in the period 2002/2003.
The Professors call for increased accessibility to infrastructure like roads, telephones, health centres, financial institutions; education centres and markets help reduce poverty levels.