The National Development Plan (NDP) III (2020/21-2024/25) set ambitious job creation targets to address the country’s unemployment problem. Throughout the five-year plan to 2025, the country aspires to generate a total of 2.5 million jobs, translating to an annual average of 512,000 jobs. The primary focus is on creating opportunities in the services sector, with a target of 1.3 million jobs, closely followed by the agriculture sector, with a goal of 796,411 jobs. These targets align with one of the objectives of strengthening the private sector’s capacity to drive growth and create jobs.
However, based on the mid-term review of NDP III, it is evident that the set targets have remained a pipe dream. Between 2020/21 and 2021/22, only 603,000 jobs were created – falling short of the 1,040,000 jobs target in the first two years. Furthermore, the plan has not achieved its objective of reducing youth unemployment from 13.3 percent to 6.6 percent.
According to the National Labour Force Survey of 2021, the overall unemployment rate stood at 11.9 percent, with youth unemployment reaching 16.5 percent. In 2020, the World Bank noted that Uganda has over 800,000 new job market entrants annually, expected to rise to one million in the next 10 years. While the youth are recognized for their high level of enterprise, the statistics from the World Bank reveal a different picture: less than 4% of them act as employers, with 52% solely working for themselves and 43% serving as unpaid family workers.
Those fortunate enough to secure employment often find themselves in low-quality jobs, emphasizing the urgent need for higher productivity jobs to drive social and economic transformation. This prevailing situation underlines the urgency for NDP IV, which will replace NDP II next year, to establish more ambitious and practical job creation targets.
The 2022 Employment and Skills Status Report emphasizes insufficient mechanisms and systems to measure, monitor, and track job creation. Throughout the implementation of NDP III, this inadequacy has posed a challenge. It is crucial that before the onset of NDP IV, proper mechanisms and systems are put in place to ensure efficient monitoring of job creation strategies.
NDP IV needs to identify sub-sectors with significant job creation potential to guide the prioritization of strategies and facilitate easy monitoring. Unlike NDP III, which solely concentrated on three broad sectors—services, agriculture, and industry—there is a need for a more detailed and comprehensive approach to identifying specific sub-sectors with potential for employment generation.
NDP III falls short in adopting a comprehensive gender perspective to job creation, posing a significant shortcoming in achieving its set targets. NDP IV needs to address this gap by considering the gender dynamics present in job creation. Understanding and incorporating these dynamics is vital for navigating the complexities of the job market effectively.
Evidence presented by INCLUDE in 2022 report emphasizes the potential of agriculture to generate more jobs for women and youth. We can attribute this to the interconnected nature of agriculture, involving both backward and forward linkages. Services follow closely, with the manufacturing sector ranking last in job creation potential. By integrating a gender-sensitive approach into its framework, NDP IV can better align with the realities of the job market and contribute to a more inclusive and effective development plan.
The NDP IV should also prioritize digitalization across all sectors and integrate them with the Information and Communication Technology (ICT) sector. The COVID-19 pandemic, beyond presenting health challenges, highlighted the susceptibility of jobs during crises. The mid-term review reveals that the first year of NDP III significantly impacted job performance, with an 8.1 percent loss in PAYE jobs due to COVID-19. Furthermore, job losses in the informal economy workforce were also caused by containment measures. By adopting a digital approach, NDP IV could be aligned with global trends and effectively tackle the changing challenges and opportunities in the employment sector.
With the upcoming NDP IV, a thoughtful and comprehensive approach to job creation is crucial. The plan must, however, set realistic targets, prioritize sectors with proven job creation potential, and embrace digitalization for economic resilience while considering gender dynamics.
The article was published in Observer on April 3, 2024.
Feature photo credit/Friedrich Ebert Stiftung