Instead of highlighting what will be done to those who will fail to repay student loans, the government should pay more attention to job creation.
The greater danger lies not in the potential loss of millions from the nominal Shs5 billion which is being invested in the scheme, but in the army of educated but jobless youth which grows each year. We must first guarantee the availability of jobs from which the scheme’s beneficiaries will earn income to reimburse the State before plotting how to punish defaulters.
It is estimated that almost seven out of every ten students leaving our universities, colleges or tertiary institutions end up either unemployed or disappear in the informal sector where there is a shocking level of disguised unemployment. This mass of unemployed people provides good breeding ground for social instability.
At the start of this financial year, the finance minister read out a budget, outlining the government’s priorities. The stand-out thing about both her speech and the President’s State-of-the-Nation address which preceded Budget Day was that more money is going to be pumped into transport infrastructure and energy. Yes, investment in road construction or hydro-electric power projects, among others, has its many merits since roads and electricity facilitate nearly every facet of commerce. But how many of the unemployed thousands can be absorbed into these relatively narrow sectors? Not enough.
The sustainable future lies in more cash going to agriculture (with its inestimable forward and backward linkages in agro-based industry) where Uganda enjoys a huge comparative advantage. The youth should be encouraged and supported to engage in commercial agriculture.
This is not to denigrate the contribution of other sectors like manufacturing, which require a lot of electricity to perform at optimum level, or the service industry or telecommunications, which have experienced phenomenal growth in the past decade. Point is that their current absorption capacity is limited to a few hundred new jobs each year.
Over the last three financial cycles, the minister has announced between 5 and 10 per cent of the budget going to agriculture. This will not do for a sector that is the backbone of the economy.
We urge the government to change this. Job creation and skilling programmes for the youth should be the country’s key priority.