Graduate entrepreneurs fuel informal sector
Living Ounyesiga
What you need to know:
- Graduates often bring innovative packaging and delivery services. Despite the vital role these small businesses play, they face significant challenges, primarily due to high taxation
Uganda’s youthful population, coupled with the rapid expansion of its education sector, has created a unique dynamic in the job market. There were over 60 universities across the country by 2024, comprising 45 private, 12 government, and five military.
In addition to universities, the network of technical institutions includes 77 government polytechnics, 35 government vocational schools, 41 government community polytechnics, 23 government technical colleges, and over 100 private technical institutions. This diversity in educational opportunities equips young people with a variety of skills and qualifications.
However, the reality of limited formal employment opportunities forces many graduates to seek alternative means of survival. While the expectation is to secure roles in prestigious organisations, the oversaturated job market has left many to turn to small businesses, often in sectors not directly linked to their fields of study. Small sectors stand out in particular for their ability to employ youth and contribute significantly to the economy: boda boda riding, chapati making, mobile money agency, and vegetable vending.
These small enterprises not only offer a way to make ends meet but also serve as vital pillars of the local economy. Boda boda riding in Uganda is a lucrative sector, employing many young people and providing immediate income for graduates. Despite potential risks like accidents and theft, it remains a reliable source of employment. Chapati making is another flourishing sector, especially in urban and peri-urban areas.
Small roadside kiosks, often referred to as “Rolex stands,” serve a growing demand for affordable, fast food. Youth graduates have tapped into this market, leveraging their creativity to introduce variations that appeal to different customer segments. The popularity of chapati-based meals demonstrates the sector’s potential for scalability and innovation. The rise of digital financial services has created opportunities for youth to operate as mobile money agents. This role involves facilitating transactions, including deposits, withdrawals, and bill payments, for a wide range of customers.
Mobile money services are indispensable in Uganda, where financial inclusion remains a key challenge. For graduates, this business offers not only financial independence but also a chance to engage with emerging financial technologies. Vegetable vending is a staple in Uganda’s informal economy. Young people are supplying fresh produce to communities through market stalls and door-to-door deliveries, promoting food security and sustainability.
Graduates often bring innovative packaging and delivery services. Despite the vital role these small businesses play, they face significant challenges, primarily due to high taxation. The government’s tax policies place a heavy burden on these enterprises, threatening their viability and the livelihoods of those who depend on them. For the more than 40 percent of graduates who rely on these sectors as a means of survival, high taxes exacerbate financial strain and hinder growth opportunities.
Reducing taxes on small businesses would provide immediate relief and stimulate economic activity. It would also acknowledge the crucial role these enterprises play in addressing unemployment and supporting youth empowerment. The government should prioritise small businesses, implementing lower tax rates, providing tailored training programmes, streamlining licensing processes, and offering legal protections for sustainable growth.
This would benefit youth graduates, enhance business management, and create a conducive environment for growth. These silent fast-growing sectors in Uganda are crucial for youth graduates and the economy. However, high taxation and barriers to entry are hindering full potential utilisation. By fostering an enabling environment, Uganda can reduce unemployment and empower youth for meaningful development.
Dr Living Ounyesiga is a lecturer at Kampala International University
