One of the objectives of Uganda’s early retirement programme is to create employment for the educated youth. Currently, 6,500 retirees create 6,500 vacancies annually.
However, will these vacancies solve Uganda’s unemployment problem? Someone wrote about how the pensioners will turn entrepreneurs overnight and invest their money in employment-generating projects! What evidence is there to support this argument?
Only entrepreneur-oriented retirees can take the risk to invest their pension into employment-generating projects. But because they are entrepreneurs, they already have these projects! So, yes, entrepreneur retirees will use their pension to expand their projects.
Unfortunately, entrepreneurs form a small percentage of the retirees.
Many pensioners may prefer to invest in what they wrongly believe are less risky projects, for example, cottage industries including poultry and pig farming, zero grazing, buying and selling produce, maize, rice, jaggery mills, boda boda, matatu and kiosks. Others could invest in “politics”. Besides mostly employing extended family members, such projects don’t offer the type of jobs the ‘educated’ seek.
But, these projects may not come to fruition because there is a serious contender for the pension money. Many retirees are family people who have been living from hand to mouth. They don’t have a “family house”. Building a family house will be priority! Small groups of professionals might form “briefcase” businesses – teachers may coach, engineers might practice and doctors could open clinics.
These businesses will be designed for themselves, will generate mostly clerical jobs for the extended family, but will hardly employ other professionals in the job market!
How then can Uganda salvage its escalating unemployment problem?
The answer lies in private investment driven by a partnership between international and indigenous investors, and facilitated by the government and the Uganda Investment Authority. The starting point is for the government to provide the ingredients of an attractive investment environment
SOURCE: Daily Monitor