1% of Working Ugandans earn above Shs1M - BoU

Nearly  50 percent of the 22.8 million working Ugandans earn less than Shs150,000, according to Bank of Uganda Financial Capability Survey. PHOTO | file 

What you need to know:

According to the Bank of Uganda Financial Capability Survey, out of the 22.8 million working Ugandans, only 1 percent earn more than Shs1m while 49.2 percent earn less than Shs150,000 per month.

Data from Bank of Uganda indicates that just 1 percent of working Ugandans earn more than Shs1m on a monthly basis.

The data is contained in the Bank of Uganda Financial Capability Survey, which also indicates that more than 45.4 percent of adult working Ugandans are 35 years and below.

The survey, which was conducted among 3,338 households across Uganda with a response rate of 97 percent, is representative of 22.8 million working adults from 16 years and above.

At least 74.6 of working adults, the survey indicates, are self-employed in production and services, of which 53.4 percent sell produce as a major source of income.

However, the survey does not indicate in which sectors most working adult Ugandans are employed even as previous reports have indicated that agriculture employs the largest segment of Ugandans.

Mr Douglas Opio, the Federation of Uganda Employers, executive director, said there is need to be deliberate on formalising the informal sector through incentivising formal businesses, which supports real growth.

“Majority of the people are selling produce. We need to promote agro-processing and value addition to increase incomes,” Opio added, noting that this will in a way lead to business formalization and employment creation.

The Bank of Uganda, which also indicates that 79.6 percent of working Ugandans have not completed secondary level education, notes that nearly half of working Ugandans, which translated into 49.2 percent, earn less than Shs150, 000 per month.

The report also highlights a number of issues such as a weak saving culture, modes of investment, low uptake of insurance and retirement, among others.

Majority of working Ugandans, who sought to invest, the survey notes, opted for agriculture, which the survey places above all other sectors.

Employment remains a big challenge with majority of Ugandans opting for self-employment in makeshift setups.

Unemployment has also in a way spurred business startups, placing Uganda among the world’s leading enterprising country.

However, challenges such as Covid has presented new challenges leading to massive loss of employment and income among a number of households in the last three years.

Shocks to employment      

During the last two years there have been shocks to employment that have impacted pay as companies struggle to mitigate a fall in revenues.

This has led to layoffs, which according to data from Ministry of Gender, Labour and Social Development, indicate that the abrupt closure of the tourism industry, including hotels, affected about 430,000 placements and impacted incomes of more than 350,000 teachers in private schools. Restaurant and bar attendants, who are among the lowest pay bands, also suffered long periods of no income of more than two years.

In its quarterly labour market information bulletin report between July and September 2020, the Labour ministry noted that Uganda Investment Authority and Uganda Bureau of Statistics had conducted a Covid-19 impact assessment on 870 businesses and workforce, which showed that 16.5 per cent of the enterprises had staff layoffs countrywide, and another 23.8 per cent had introduced stay-at-home measures with minimum facilitation, while 21.8 per cent of the sampled companies had limited staff working hours.

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