On several occasions, President Yoweri Museveni has told whomever cares to listen that “Ugandans are lazy”, an indication that a Ugandan worker produces much less output per hour compared to regional peers.
This perception has negative implications on foreign direct investment and subsequently job creation, living standards, economic growth, and competitiveness. At firm level, low labor productivity affects profitability because each shilling spent on labour leads to fewer shillings in earnings. At country level, low labor productivity stagnates the rate at which the economy grows.
According to the International Labour Organisation (ILO), labour productivity in Uganda is $3.53 (UGX 13,200), per one hour of work. Productivity average for low-income African countries is $2.93. Despite being above average, Uganda’s labour productivity is lower than that of Kenya ($4.75). This suggests that compared to Uganda, Kenya is able to draw in more international investors and ultimately generate more job opportunities.
Low productivity in Uganda is attributable to relatively high levels of informality, which makes many employers disregard labour market regulations, consequently putting workers into ‘vulnerable’ employment category.
Such workers have no formal work arrangements, work in indecent conditions, and lack a ‘voice’ for effective representation by trade unions. National Organisation of Trade Unions (NOTU) reports that some employers do not give employees written employment contracts, resulting in a lack of job security and union representation.
The International Trade Union Confederation (ITUC) indicates that 70 percent of the workers in Uganda are engaged without a legal/written contract, yet it is a legal requirement for the employer to provide an employment contract for each employee. Companies in Uganda often engage in schemes to sabotage collective voices of workers.
This is aggravated by lack of sufficient labour inspectors to inspect the working conditions in the work areas. In Uganda, the ratio of inspectors to employees is 1 to 210,000 yet ILO recommends 1 to 40,000 employees. Among other things, labour officers in Uganda are mandated to secure the enforcement of legal provisions relating to conditions of work and reporting abuses not specifically covered by existing legal provisions.
Due to absence of labour inspectors coupled with poor working condition, it is no wander that Uganda, according to the ITUC, ranks 4 out of 5+ (5+ is worst) on the Global Rights Index, a rating of how workers report systematic violations at workplaces.
Public sector workers have not been spared from these productivity constraints. Public sector workers are constrained by lack of critical supplies that are needed to do their jobs. The Budget Monitoring and Accountability Unit (BMAU) at Ministry of Finance reported that the performance of agriculture extension workers is severely hampered by the limited availability of transportation and fuel, which affects frequency of field visits to farmers.
In addition, the high rate of brain drain Uganda is not only depriving the country of high skilled and subsequently high productive workers, but also depriving Uganda of its educational investment. Other countries are benefitting from Uganda’s professionals, especially in the medical and education fields due to brain drain.
World Bank research shows that 47 percent of Ugandans who migrate are highly skilled. According to the Organization for Economic Cooperation and Development (OECD), Uganda ranks 12th with the highest number of highly skilled workers in the OECD countries. The Economic Policy Research Centre research reports that approximately 781,440 Ugandans are working in East African Countries and over 140,000 Ugandans working in the Middle East.
Brain drain is mostly attributable to low pay. Although government in recent years enhanced salaries for scientists, it is still not competitive even within the East African Community.
Labour productivity is a function of working conditions. In this regard, government needs to strengthen compliance to labour market regulations by increasing the size of labour inspectors.
Relatedly, there is a need to identify and monitor informal businesses to ensure that they comply with the labour laws. Partnerships of labour inspectors and trade unions with health, agricultural and Community development officers could facilitate coverage of the many informal businesses. This approach has successfully been used in the Philippines.
Increasing productivity also requires a strategy to curtail brain-drain. This can be achieved by harmonising salaries in the East Africa Community (EAC). This should be augmented with the corresponding provision of critical supplies that workers need to perform their duties effectively.
This article was first published by Daily Monitor on May 13, 2023.