People work on a machine. Experts say there is a need to realign educational and vocational training programmes to equip the workforce with the necessary skills to thrive in the formal service sectors. PHOTO | FILE
A stark mismatch between the expectations and requirements of employers and the abilities and skills possessed by job seekers across the country continues to keep millions of young Ugandans jobless. While graduates find themselves ill-prepared for available job opportunities due to the non-alignment of the curriculum in many educational institutions with the practical skills needed in the labour market, the inadequate amenities in vocational skills training institutions across the country have continued to hinder quality skills acquisition.
Between 2011 and 2020, the government rolled out the 10-year Skilling Uganda Strategy as a significant initiative to transform the Technical and Vocational Education and Training (TVET) system to respond to the needs of the labour market. A 2021 Uganda Investment Authority (UIA) survey put the fraction of the country’s graduates who worked in jobs that did not match their qualifications at 30 percent. A 2022 report by the Uganda Manufacturers Association (UMA) also offered support, noting that up to 68 percent of manufacturing firms faced difficulties hiring workers with the necessary technical skills.
These deficits are not without consequences as they negatively impact growth and productivity. A turnaround is not entirely assured if anything because students often consider TVET a less prestigious alternative to traditional academic pathways. Additionally, many TVET institutions suffer from inadequate funding and infrastructure, which raises concerns about the quality of training and limits the practical skills and resources available to students.
The country’s employment landscape is significantly transitioning, as a growing proportion of the workforce shifts from traditional sectors (agriculture and production) to service-oriented roles, thus increasing demand for service sector skills. The transition, according to Makerere University’s Economic Policy Research Centre (EPRC), necessitates a realignment of educational and vocational training programmes to equip the workforce with the necessary skills to thrive in the formal service sectors. In a September 2024 publication, EPRC researchers examined the enhancers and barriers to skills acquisition in Uganda and the interactions between Uganda’s labour supply and demand.
The data indicates that a significant proportion (25.1 percent) of individuals with matching education levels work in low-skilled jobs. Those who work in skilled (14.3 percent) and highly skilled (5.8 percent) occupations are significantly lower. There are also instances of overeducated individuals occupying skilled (3.7 percent) or low-skilled (7.7 percent) positions, indicating a misalignment between education levels and the skill requirements of their jobs. “This mismatch between education and skill levels in the labour market is evidenced by the presence of under-educated individuals in both skilled (13.9 percent) and low-skilled (28.4 percent) occupations,” EPRC’s report notes, adding, “These mismatches lead to reduced job satisfaction, lower wages, and reduced productivity which in turn has a long-term impact on the country’s workforce as well as economic growth.”
Plugging gaps
It is also established that rural-urban disparities play a key role in the skills and education level mismatches, with urban individuals experiencing higher over-qualification rates (48.1 percent) than those in rural areas (32.3 percent). The report goes on to note that there are disparities in employment and educational patterns, with over 90 percent of individuals employed in the agricultural sector or in low-skilled occupations. On the individual’s field of study, the researchers found that many individuals who studied education (58.5 percent) and natural sciences, mathematics, and statistics (65.2 percent) are in high-skilled occupations. According to the World Bank estimates, 700,000 young people reach working age every year in Uganda. This is projected to rise to an average of one million between 2030 and 2040.
To bridge the digital divide, Mr Stephen Asiimwe, the Private Sector Foundation (PSF) executive director, says the government needs to invest more in infrastructure, revise curricula to incorporate the in-demand skills, and enhance public-private collaboration for an inclusive labour market. “Vocational and technical education programmes need to be enhanced to align with the skills most in demand. There is a need to promote continuous/lifelong learning and up-skilling initiatives to address regional and demographic disparities in skills acquisition,” he says. To prepare individuals for the rapidly transforming labour market, institutions must prioritise the development of digital, socio-behavioural, analytical, technical, and entrepreneurial skills, Mr Asiimwe suggests.
Pandemic impact
Whereas the National Labour Force Survey (NLFS) 2021 data indicates that 41 percent of the youth (approximately four million Ugandans aged between 18 and 30) are not engaged in any productive activity, underemployment and informal employment pose an additional challenge. The Uganda Bureau of Statistics (Ubos) in a 2021 report revealed that of the 87 percent of the working population, 40 percent are in subsistence employment. Ubos’ data set also indicated that 10 percent of the employed population did not possess any formal education, and another 67 percent did not have any trade or technical skills or specialisation. “We do not have as many industries as possible, and yet, if you look at our population, it's growing every day. So you're left with agribusiness and labour services, more industries should be established,” Mr Asimwe tells Saturday Monitor, adding, “The SME sector is the biggest employer in Uganda, comprising small companies that cannot employ many and have lower capitalisation and therefore low business throughput.”
It is estimated that there are about 1.5 million micro, small and medium enterprises (MSMEs) in Uganda. These employ approximately 2.5 million people. Each single one of these enterprises employs 50 persons or less and has a revenue of less than Shs360 million per annum. Besides the limited data about MSME sub-sector performance, the private sector, largely dominated by MSMEs, faces several challenges, including limited business and managerial skills due to a big skills gap. To exacerbate the unemployment situation, the outbreak of the Covid-19 pandemic reshaped Uganda’s employment landscape. The pandemic induced enterprises nationwide to undergo structural transformations, embracing digital tools and new technologies, per the ICT & National Guidance ministry’s 2023 technical report. Since remote work gained prominence, with an average of 28 percent of employees working remotely during the pandemic, working spaces were severely constricted.
Even in the post-pandemic era, virtual collaboration tools and remote communication methods have remained integral to the new work landscape, with the traditional office setting being redefined. With the evolving labour market, digital skills, socio-behavioural skills, and analytical and technical skills now dominate the much-sought ingredients employers eye in employees. Employers continue to adapt to new work structures, and employees are navigating changes in job roles and expectations, including proficiency in digital devices, communication applications, and networks. This implies that traditional labour market and social policies, which were adequate for decades, are facing challenges in adapting to the rapidly evolving world of work. To solve the problem of advanced demand-driven skills, the government is now leveraging the Business Process Outsourcing (BPO) and IT sector, the ICT ministry says in its Uganda BPO & IT Services Job Creation Strategy 2030.
Digital economy
Post pandemic, as business continues to be undertaken online, the national Business Process Outsourcing (BPO) Policy, which is soon to be tabled before the Cabinet by the ICT and National Guidance ministry, has taken on great significance. The document details the high cost of laptops as a result of a three-tiered duty structure for imports outside of the East Africa Customs Union. Because of the duty, IT hardware and devices such as laptops, tablets and computers are subject to a VAT of 18 percent and a withholding tax of 15 percent (cumulative 33 percent tax). These are said to inhibit the youth who want to upskill their digital competencies. It also hasn’t helped matters that Internet connectivity speed for fixed-network broadband Internet lags is abjectly bad. Uganda places 150th globally, with an 11.13 Mbps download speed compared to 82.77 Mbps for the number one-ranked country.
In February, the Ministry of ICT and National Guidance unveiled the National BPO Policy that seeks to position Uganda as Africa’s leading Business Process Outsourcing (BPO) destination and enhance the country’s visibility to global investors. The intervention’s proponents believe that it will provide an enabling regulatory environment to minimise operational costs and equip Uganda’s workforce with the necessary digital skills to meet the demands of the global outsourcing industry. It will emphasise Uganda’s thriving digital economy, innovation-driven entrepreneurial culture, and rich tourism appeal, reinforcing the country’s position as Africa’s premier outsourcing hub, Dr Chris Baryomunsi, the ICT and National Guidance minister, said of the BPO as a vehicle that will create jobs and boost Uganda’s digital exports. “Business process outsourcing is a game changer—not just for job creation, but for positioning Uganda as a leader in digital service exports.
This will drive awareness, connect Ugandans to new opportunities, and ensure we fully harness our potential in the global outsourcing industry,” Dr Baryomunsi said. At its launch, Dr Aminah Zawedde, the ICT and National Guidance Permanent Secretary, said: “We must ensure that young people are informed, skilled, and prepared to seize these opportunities. This policy and campaign will drive that awareness and create a clear path for participation.” With Uganda’s youth population averaging 14.9 years and more than 70 percent of those aged 18 to 35 struggling to find employment, the new policy is expected to amplify Uganda’s global presence in the outsourcing sector. In Uganda, this sector, comprising 44 BPO and information technology outsourcing (ITO) operators, is currently valued at $131m and employs above 12,000 people in full-time jobs with benefits and worker protections.
