Thursday, December 18, 2014

Dr. Edward Bbaale: Should Many Ugandans be Engaged in Agriculture?

By Esther Nakkazi

Uganda's agriculture sector cannot generate jobs yet it is a leading employer in Uganda, with over 8 million people or over 70 per cent of the entire labor force. In terms of productivity, it also has the lowest output per worker researchers say.

This implies that the majority of workers in Uganda are holders of low paying jobs, with very low prospects of overcoming the problem of poverty says Edward Bbaale, a researcher with Center for Basic Research and School of Economics at Makerere University.

So, is it necessary for so many Ugandans to engage in agriculture? Especially, at this point in time, when the demographic dividend is generating a window of opportunity to raise per capita income and thus reduce poverty?

Even when Uganda records growth in the agricultural and manufacturing sectors, they are jobless while growth in the services and industrial sectors is job generating.

A paper by Bbaale entitled ‘Is Uganda’s growth profile Jobless?’ points out that more people should be engaged in other productive activities and sectors rather than agriculture if Uganda has to reduce on its poverty levels and create jobs for the youth.

The research published in November 2014, was funded by Canada’s International Development Research Centre (IDRC)

This paper set out to establish the link between economic growth and employment in Uganda for the period 2006 to 2011. Data is from World Development Indicators, Uganda National Household Panel Survey (2011) and United Nations Statistical Data Base. Researchers adopted the Job Generation and Decomposition (JoGGs) Tool of the World Bank during the analysis.

Overall, the promising sectors for poverty reduction through productivity and employment generation in Uganda by order of importance are; services sector, industrial sector and manufacturing. "If adults manage to engage in these sectors , the demographic shift will have an important poverty reducing impact," says Bbaale.

The services sector was employing over 2 million Ugandans, that is 19 percent in 2006 and 22 percent in 2011 of the labor force. It had all its contributions positive; contributed 39 percent to output per worker and 14 percent to the growth in employment.

“If East African governments are to cope with the pace at which new young entrants will come into the job market in the next decade, there is an urgent need for new innovative approaches to accommodate this youth bulge,” said Eugenia Kayitesi, Executive Director of the Institute of Policy Analysis and Research (IPAR-Rwanda).

Bbaale, however, cautions that agriculture still remains important because it is a major employer in Uganda.

Policy Question:

Since agriculture generates low income for its workers this puts a policy question on the productivity of jobs held in the agricultural sector.

Apparently, agriculture contributes to a decline in the employment rate by 6.5 percentage points. But there are positive increments noted in the services and industrial sector with 1.73 and 0.5 percentage points, respectively.

Of the -20 US dollars registered in per capita output, agriculture and manufacturing contributed negatively with -29 and -0.8 US dollars, respectively. Services and industry contributed positively 7.7 and 2.1 US dollars, respectively.

These findings combined with high productivity in services and industrial sectors give a great prospect to these sectors in an effort to reduce poverty via employment creation.

Agriculture being the major sector in Uganda, a small contraction in employment led to a very big negative effect on growth such that the positive effect in services and industry could not offset it.

Youth Employment:

IPAR-Rwanda in collaboration with Canada’s International Development Research Centre (IDRC) convened a high level conference on innovative approaches to incorporate youth into labour markets in the East African region in November 2014 in Kigali, Rwanda.

In his presentation at the conference, Bbaale said at least 25 percent youth could not find suitable work and 64 percent were discouraged from looking for work because they thought that a job search would be a futile effort. 9 percent did not know where to seek for work.

For those who managed to get employment, 52 percent did not have a contract with the employer, they had an oral contract with an unlimited duration. Some youth were self employed and most of them raised their own start-up capital for their businesses.

Most youth’s reason for becoming self employed were voluntary because they had a desire to become independent and more flexible hours of work, said Bbaale of his research.

Bbaale says governments in East Africa should be mindful of the influx of the youth to urban centres. And the education systems should orient towards relevancy to the job market.

“Supporting youth to find productive employment is a global priority, the situation in Africa could not be more urgent,” said Arjan de Haan, Program Leader of IDRC’s supporting inclusive growth programme.

He also found out that very few youth have benefited from the government youth fund. The majority of the youth also argued that government programmes were not addressing youth unemployment and were not innovative.

“Research and evidence coupled with experience sharing between countries in the region, and giving the youth a voice are all critical ingredients to providing policy makers and practitioners with the tools that are needed to address this growing challenge,” said Arjan de Haan.


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