World Bank: Uganda’s economy must grow faster, or else..

By Jonathan Kamoga

Unless Uganda’s economy grows faster than its current pace, the country will find itself with a crisis of more workers than jobs.

According to a new World Bank report released on Tuesday, Uganda has had more than 300,000 additional workers enter the job market annually between 1992 and 2014, and the number is set to rise to over 1 million between 2030 and 2041 annually.

The report, “Uganda: Jobs strategy for inclusive growth,” says that with the country’s growing population, an economic transformation that will create jobs creation requires a faster urbanization with industrialization, which should begin with the development of commercial agriculture.

The country’s agricultural sector employs nearly 82 percent of the workforce and accounts for around 80 percent of the annual export earnings.

Three-quarters of the unprecedented number of young Ugandans entering the labor market work in agriculture where productivity growth is negligible, translating into slow economic transformation.

The country’s prevailing economic growth is no longer high enough to create more and better jobs for its population for the next 21 years, and the World Bank report says the country’s gross domestic product (GDP) increased by nearly an average of 7 percent between 2000 and 2012. However, the growth has been slowing down since 2006, dipping below 5 percent in 2016, when the bank last collected household data.

The economy however reported strong growth in 2019, estimated at 6.3 percent, largely driven by the expansion of services and industrial growth driven by construction and mining. However, the real problem lies in the economic slowdown across main economic sectors and in all former growth drivers.

Over the time covered, the report notes the deteriorating quality of jobs characterized by spatial inequalities, a slow urbanization process and a low demand for wage workers in the private sector.

“Wage job opportunities depend on having a dynamic private formal sector that is expanding and therefore hiring workers. Large firms are often in a position to provide more productive employment,” the report says.

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