High youth unemployment persists despite entrepreneurship training

Tuesday July 03 2018

Youth get training in car engine mechanics. Students who fail to enrol for a degree at various universities should try their luck in vocational training institutes.

The promise:
In the run up to the 2011 General Election, the ruling NRM party announced that it had designed what it described as a comprehensive job creation strategy for implementation in the period between 2011 and 2015 if it was handed another mandate to manage matters of State.

The aim of the strategy, which was contained in what came to be known as the “Peace, Unity and Transformation for Prosperity” manifesto, which the party released in October 2010, was to ensure that “all Ugandans are gainfully employed”.
This was meant to be achieved by way of implementing a 10-action point plan, which specifically targeted the youth, who the party claimed were at the centre of its thinking, policy formulation and programmes.

Among the specific activities that government listed for action was the signing of a pact with Enterprise Uganda to provide skills training in the area of business.
“Youth Business Skills Training (is) to be undertaken by Enterprise Uganda. Enterprise Uganda shall set up five (5) Regional Skills Development Centres to undertake entrepreneurship and business development skills among youth,” the manifesto read, in part.

Other youth-centered activities planned for implementation included, among others, attraction of more investors, creation and opening of business parks in various parts of the country and opening up a youth enterprise start-up fund.
A year before the manifesto was unveiled, government had made an attempt to address the youth unemployment question by announcing tax relief in the agro-processing, hotel, education and health sectors in order to stimulate an economy that had considerably slowed down.

It at the same time gave Shs2.5 billion to both Uganda Investment Authority (UIA) and Enterprise Uganda.
UIA received Shs1 billion meant to facilitate it to open up a Small and Medium Enterprises (SMEs) desk, while Shs1.5 billion was given to Enterprise Uganda to enable it provide youth with training in business and entrepreneurship skills.

Uganda was at the time estimated to be having 800,000 SMEs believed to have been providing employment to about 2.5 million people. The SME sector was also believed to be growing at a rate of 20 per cent per year, which made policy makers believe that if it were to be strengthened, it would help in the absorption of many of the unemployed youth.


At the same time, government had, through the Ministry of Finance, Planning and Economic Development, made Shs1.5 billion available to Enterprise Uganda to train the youth in entrepreneurship.

Government’s moves in the Financial Year 2009/2010 and the action that was promised in the NRM’s 2011-2016 manifesto, came at a time when the African Development Bank’s (AfDB’s) Partnership Forum had put national unemployment figures at 83 per cent.

The World Bank had at the same time put youth unemployment in Kampala alone at 32.2 per cent and unemployment among university graduates in Kampala at 36 per cent.

While medium and large scale private sector firms are the biggest employers of graduates outside the public sector, they constitute but a small share of the national economy. A Census of Business Establishments that was conducted in 2010 indicates that they employ only 3.3 per cent of the total number of workers in Uganda, including professionals and university graduates.

By the time the manifesto was launched, Uganda’s population was estimated at around 32 million people, out of which 78 per cent were believed to be youth between 15 and 30 years of age and unemployed.
Unemployment had risen from 1.8 per cent in 2008 to 2.8 per cent in 2009, before shooting up to 3.1 per cent in 2010.
The interventions promised in the manifesto were, therefore, received with high expectations that they would help tackle, at least in part, the issue of unemployment, especially among the youth.

While it is true that youth and other interest groups such as women have been drilled in the area of entrepreneurship and in so many areas provided with startup capital through various programmes such as the Youth Venture Fund, Youth Livelihood Fund and others through the Women’s Entrepreneurship Fund, the drills and cash injections have so far had very little effect on the unemployment among the youth and on the general unemployment situation in the country.

As of 2012, youth unemployment in Uganda was said to be the highest on the African continent. Findings of a study, “Lost opportunity? Gaps in youth policy and programming in Uganda” conducted by ActionAid and published in 2012 put youth unemployment at 62 per cent, but that was much lower than figures from the Netherlands-based nonprofit International development organisation, SNV, which put the figure at 80 per cent and the African Development Bank, which put it at 83 per cent.

Figures from the 2014 national census showed that 58 per cent of the population in the productive age bracket of between 14 and 64 years, about 10.4 million people, is unemployed.
The report adds that 47 per cent of Ugandan males between the age group of 14 and 64 years are unemployed and there is nothing to suggest that the situation has improved.

The World Bank’s World Development Indicator and the International Monetary Fund’s World Economic Outlook show that while unemployment figures have been on the drop since 2011 when the promise was first made, coming down from 8.9 per cent in 2011 to 7.4 per cent in 2013 and 4.9 per cent in 2016, unemployment remains a big problem.

Since the programme was announced, Enterprise Uganda has been involved in a number of training programmes across the country to empower the youth with the knowledge and skills that they might need in order to become their own employers.
On Monday, the executive director of Enterprise Uganda, Dr Patrick Ocici, had promised to call back and avail Daily Monitor with figures on how many his organisation has trained over the years and other forms of support that it gives those that it trains, but he had by press time not done so.

Nevertheless, information from the organisation’s website indicates that about 64,446 youth and households have benefitted from the Business and Enterprise Start up tool (BEST), while another 4,150 youth have benefitted from the Entrepreneurship Training Workshops.

“The 5-day BEST training equips households, youth and other upcoming entrepreneurs with the confidence and practical skills to start and run successful enterprises. It identifies and confronts negative attitudes, beliefs which act as obstacles to creating jobs by young people and re-orientates mindsets suited for a globalised business village,” the information on the website reads, in part.
Also worthy of noting is that while the five regional training centres that were meant to have been opened are yet to come on stream.

We do commend government’s efforts in trying to tackle the problem of youth unemployment in the country, but a lot more needs to be done.

On Monday, while talking to Daily Monitor, the chairperson of the Parliamentary Committee on Finance, Planning and Economic Development, Mr Henry Ariganyira Musasizi, said Uganda seems to be losing the fight against unemployment because it is not giving enough attention to those areas that can absorb so many of our unemployed people.

While it might not be bad for government to encourage investors to come over and set up industries, advancement in technology has meant that the manufacturing sector is no longer labour intensive. Most of the machinery is automated just like most of the agricultural tools on extensive farms are also highly mechanised with ability to carry out most of the tasks that used to be carried out by labourers on the farms.

The situation, therefore, calls for strategic investments in the development of sectors such as tourism and the service sector. It is highly important that government moves to increase funding to the Uganda Tourism Board.

In the run up to the Commonwealth Heads of Government (Chogm) summit in Kampala in 2007, government put in place an incentive regime that helped many of our hoteliers to put up hotels and conference facilities. We need to have these reintroduced for a specified period of time in order to allow for the country to build capacity in the tourism and service sectors so that they can in turn absorb some of the unemployed people out there.

Government should at the same time consider increased investment in infrastructure such as the tourism roads, which have been pending for so many years now.