Labor Day: How far has Uganda gone with SDG 8? (Economic growth, Employment and Decent work)

Globally, says the 2018 United Nations Report on SDGs, labor productivity has increased and unemployment decreased. However, there are serious gaps (for example, unemployment of young, informal employment, unfair gender pay gaps, insecure working environments and unfavorable financial solutions).

In 2016, real GDP per capita grew at 1.3% (less than 1.7% recorded between 2010 & 2016). For LDCs, it dropped seriously from 5.7% in 2005-2009 to 2.3% in 2010-2016. The global unemployed rate was 5.6% (2017) from 6.4% (in 2000). Youth are 3 times more likely to be unemployed. Globally, youth unemployment stands at 13% in 2017 (UN, 2018).

While almost every adult has an account with a financial institution (say a bank) in developed nations, only 37% adults in LDCs have accounts. Across the globe, women lag behind in this. Inequality in earnings is still pervasive. For example, the 2018 UN report says that data from 45 countries revealed 89% of these nations to be paying women less than they do men counterparts (about 12.5% median pay gap). In Uganda, 79% of the population don’t have bank accounts. This, explains Bank of Uganda (2014), could be due to unavailability of bank services in some parts of the country.

In addition, explains Kretchun of Intermedia Uganda in their 2017 financial inclusion survey, many Ugandans now access financial assets via mobile money, SACCOs and other financial institutions. A 2013 study by FinScope Uganda revealed that more than 54% Ugandans have access to financial institutions, with 74% of these 54% accessing finances through other institutions and not the bank.

Talking about mobile money, SACCOs and other financial institutions, it is important to note that almost half of the population (22 million people) are mobile money registered users even though mobile transactions reduced from 19 trillion in June 2018 to 14 trillion shillings in September 2018 due to introduction of mobile money tax. By 2014, there were 2094 SACCO branches across the country, with eastern region having 675 and the least Northern region registering 349 SACCO branches. However, most of these SACCOs aren’t working at all. A 2015 report revealed that more than 50% of the said SACCOs are missing.

Talking about mobile money tax, it hurts small businesses only since bigger business don’t use mobile transfers. And, additionally, it cannot increase a country’s tax base to an effect; it can, instead result into other financial behaviors that are costly to the government as users try to dodge the tax or fall back from there once tax contributing businesses.

In Uganda, Bank of Uganda released an official economic report in March 2018 and noted that already the economy had increased by 1.3%, though was a little less compared to 2.5% of Q4-2016/2017 (Bank of Uganda, 2018). Currently (1^st May 2019), 1 American dollar is equal to about 3,743.7 Uganda shillings (BOU, 2019) and the average GDP growth rate is at 4.5% (BOU, 2018). This is still less compared to SDG target of 7% annual growth rate of GDP in least developed nations and less compared to past growth rate of about 6.7% between 1990 and 2015. The inflation rate was at 6.7% in February 2018 (BOU, 2018).

The 2017 country’s GDP (PPP) estimates were at 88 billion US dollars and nominal GDP (without accounting for inflation) at 25.8 billion US dollars. The big difference reveals differences in cost of similar goods across different countries (levels of inflation). Recent data (World Ban, 2017) puts our GNI-PPP (Gross National Income) at 78 billion US dollars. In other words, Ugandan citizens (whether in Uganda or abroad) produce goods and services valued at 78 billion, meaning that the 10 billion we counted in our GDP doesn’t belong to us but foreigners working in Uganda. To understand the relationship or difference between GDP and GNI, you will have to ask me!

According to the national household survey of 2017, many more people are still in subsistence farming (UBOS, 2017) and employment rate (the number of people actively looking for a job as a percentage of the labor force) stands at 2.10% (UBOS, 2017). Working populations increased from 12.9 million in 2009/10 to about 13.9 million in 2012/13 and about 72% of these people work in agriculture sector, the sector that is most informal and unmodern and pays less for hard labor. 65% of 20-24 aged Ugandans aren’t employed (about 11 million youths) and about 90% of those above 25 years are unemployed (UBOS, 2017). The 2018 population status report says that more than 8 million youth are employed in dangerous jobs and more than 67% women are employed in informal agriculture and paid less or none for their hard labor (NPC, 2018).

According to UNDP (2015), the global goal is to reduce the number of unemployed youth and improve global economy through diversification, innovation, and using technology by 2030. In Uganda, given the fact that many people still rely on subsistence and traditional methods of farming, there is need for great diversification, application of modern methods of agriculture and generally industrializing the economy if 2030 economic agenda is to be realized. Industrializing the economy? We will discuss this in our future days for we are no longer talking about industries with fumes and manufacturing but the 21st century ones without chimneys!

Moreover, these efforts must be fair, inclusive, and spread across all populations. According to Oxfarm (2017), Uganda is unpopular with various economic policies (especially unfair taxes, strict and costly business registration protocols) that are not favorable for small-scale businesses or start-ups. Government’s recent moves on use of social media and general prices of internet may as well have negative impact on the road of applying science and technology to daily business.

So have we achieved some progress? Of course yes, the GDP has increased and economic growth rate isn’t bad. Besides, the rate of entrepreneurship launch and SACCO movements have increased but people are still poor and doing badly in terms of social services; this can’t be development. In other words, we have economic growth with no general improvement of people’s lives. This must change if we are to realize Vision 2040 and Global agenda of 2030. The only challenges remain with supportive policy, OTT and mobile money taxation, corruption and bad politics, terrible banking and financial sector, characterized by high interest rates and demand for security before securing loans, employment gaps, and inactive or irresponsible youth. Let us make it better!

Happy Labour Day

NB: A full document reviewing all SDGs in Uganda’s context is on the way and you shall know when it is up for download. For now, keep enjoying your day.

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