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Making the economy work for young people, experts speak out

Analysis

Making the economy work for young people, experts speak out

(L-R) MUBS Principal Prof. Wasswa Balunywa, Economist Ramathan Ggoobi and former minister of Finance Maria Kiwanuka

(L-R) MUBS Principal Prof. Wasswa Balunywa, Economist Ramathan Ggoobi and former minister of Finance Maria Kiwanuka

Although Uganda’s economy has expanded more than six times over the past three decades, new findings reveal that the impressive growth has mostly benefited a few Ugandans and foreigners and left majority of the population languishing in poverty and joblessness. The biggest losers of this tragedy are the youth.

Ramathan Ggoobi, a lecturer at Makerere University Business School (MUBS) working with other economists, has done a number of studies in recent years in which he found that Uganda’s young people have been sidelined from gainful employment because the sectors that witnessed the growth, particularly the services and manufacturing sectors  have not generate enough well-paying jobs.

Recently Ggoobi presented findings from some of those studies under the banner; The Paradox of Economic Growth & Unemployment in Uganda during the monthly Makerere University Business School Economic Forum.

These findings are difficult to ignore considering the proportion of young people in Uganda (73% of the population under 35yrs) but also the likely adverse outcomes of persistent unemployment on security, natural resources and generally the country’s ambition to achieve higher standards of living as indicated in the National Development Plans as well as internationally adopted frameworks like the Sustainable Development Goals (SDGs).

Ggoobi cited another 2009 study by the World Bank that showed that 83% of Ugandans were unemployed.

The situation is compounded by Uganda’s rapidly rising rate of the labour force – arising from the 3 percent population growth rate.

This means that without deliberate and urgent economic policies to reverse the situation, the unemployment crisis threatens to reverse even the little gains such as political and economic stability as poverty results into higher rates of crime, push away investors and exact pressure on natural resources.

Ggoobi argued that beyond rapid population growth, the unemployment paradox has been an outcome of low productivity growth particularly in the agricultural sector a situation that has compounded the vicious cycle of poverty and further unemployment.

The researchers found for example that the youth who comprise majority of the workforce in the country are employed in low productivity ventures such as (boda boda riding, food vending, salons and airtime kiosks as well as in the agricultural sector. The researchers reveal that Ugandan youth work just 19 hours a week, the lowest rate of labour productivity across East Africa whose average productivity is at 24 hours per week.

Solutions

According to Ggoobi, the solutions to Uganda’s jobless crisis lie mostly with the government by undertaking economic reforms in its policies on regulation, investment and education. He calls for a deliberate policies that promotes manufacturing, a sector that is not only associated with higher labour productivity but one that also has better paying jobs.

In calling for inclusive policies for the youth, Ggoobi urges the government to review its liberalisation policy by taking a more interventionist stance that propels the private sector other that leaving it to the vagaries of external competition.

Other analysts however argue that the unyielding promise on reviewing the education curriculum by shifting from one that encourages sheer academic excellence towards one that elevates skills development through promotion of vocational and teaching of science subjects, means that the country cannot step up to the challenge of establishing badly needed factories or even attract investors to set up factors here to provide decent work for the youths.

The government’s recent introduction of the Buy Uganda Build Uganda (BUBU) policy, was hailed by Ggoobi and other academics as a timely intervention that should be accompanied by action other than mere rhetoric.

But not everyone was optimistic about BUBU. Prof. Wasswa Balunywa, the Principle of MUBS slammed the government and the entire Ugandan society for tolerating corruption, a vice he said is eroding valuable resources that would have gone into transforming the economy.

Ggoobi further highlights the centrality of the agricultural sector in turning the youth into a more productive force when he says that the government needs to change from the universal approach to input distribution and instead focus on demand driven approach where farmers demand for services and demonstrate responsibility in using the inputs.

The former Minister of Finance Maria Kiwanuka, who presided as Chief Guest at the Forum went further by calling for emphasis on production of staple crops citing the huge demand for food in the region as a major incentive.

Kiwanuka also called for a holistic approach to agricultural development by supporting agri-processing, and mining to provide fertilizers to farmers.

On economic liberalisation, Kiwanuka diverted from the ambiguous government policy that gives precedence to foreigners at the expense of local investors. For Kiwanuka, Uganda should only reciprocate the treatment it gets from other countries.

Citing China as an example, she said: “Anything that the Chinese allow Ugandans to do in their country, we should allow them to do here.” She also called for a policy that ensures foreign investors to invest in rural areas to ensure more equitable development.

But even when all is said and done, the need to develop a clear policy on population control, according to Ggoobi, is urgent to stop the already serious problem of unemployment from getting out of control.

Ggoobi argues that the government could achieve this through offering incentives as well as direct control methods.

President Museveni, this week appeared to appreciate the paradox unemployment despite his impressive economic growth record.

Unlike previous speeches where he has downplayed the role of agriculture in job creation, Museveni urged the youth to consider the sector as the number one area of focus for jobs and wealth.

 

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