Uganda Faces Agriculture Output Drop

Researchers say since agriculture generates relatively low incomes for its workers, this puts a policy question on the productivity of jobs held in the sector. In their recent published findings, they say being the major sector in Uganda, a small contraction in agriculture employment leads to a very large negative effect on growth so that the positive effect in services and industry could not offset it, writes PAUL TENTENA.

Agriculture is repeatedly described as the backbone of Uganda’s economy. But in terms of productivity, it has the lowest output per worker researchers say.

According to Edward Bbaale, a researcher with Centre for Basic Research and School of Economics at Makerere University, it implies that the majority of workers in Uganda are holders of low paying jobs.

This is an issue, which means that there are low prospects of overcoming the problem of poverty by those employed in agriculture.

“Even when Uganda records growth in the agricultural and manufacturing sectors, youths remain jobless while growth in the services and industrial sectors is generating jobs for them.

“So, is it necessary for so many Ugandans to engage in agriculture? Especially, at this point in time, when the demographic changes of the population are generating a window of opportunity to raise per capita income and thus reduce poverty?” Bbaale said.

Bbaale, in his research paper 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 young people. He however, cautions that agriculture still remains important because it is a major employer in Uganda.

His paper sets 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.

One notable finding is that there are now fewer dependents per working age adults and this trend is likely to continue.

“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,” Eugenia Kayitesi, Executive Director of the Institute of Policy Analysis and Research (IPAR-Rwanda) said.

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.

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

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.

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% youth could not find suitable work and 64% 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% 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.

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

He also found out that very few young people 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,” Arjan de Haan said.

Source : East African Business Week

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