Tag Archives: unemployment

The impact of immigration in Uganda

The issue of immigration has taken center stage in domestic, regional and international debates. Global economic hardship and the associated high unemployment as well as demographic dynamics have triggered the resurgence of interest in reviewing the benefits and costs of immigration. In Uganda concerns about immigrants’ disproportionate participation in the economy, politics and security forces are being expressed in various forums. Globalization and East African economic integration processes have opened Uganda gates to all kinds of immigrants with serious political, economic, moral and cultural repercussions.

Uganda’s story about immigration goes back to the 1920s. Pull economic factors as Uganda began cultivating cotton and later coffee that required a lot of labor and push political and economic factors in neighboring countries especially then Rwanda-Urundi resulted in many immigrants entering Uganda in search of work. Other immigrant workers came from Kenya and then Tanganyika. They located in areas where they could find jobs according to their skills. Those with herding skills went to cattle herding areas in all parts of the country particularly in Ankole, Buganda, Eastern and Northern Uganda. Those with farming experience found jobs in cotton and coffee growing areas in Buganda and parts of Eastern Uganda. Some workers returned to their countries of origin, others stayed. Some of those who stayed married local women, adopted local languages and culture and got completely assimilated. Others adopted local languages and names but married women mostly from their country of origin or from their ethnic groups already in Uganda and resisted assimilation or Ugandanization.

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NRM government must tackle youth unemployment

Rising youth unemployment including university graduates and the associated poverty and hunger are approaching dangerous and potentially explosive proportions. It is now clear that market forces and the invisible hand that have guided Uganda’s economy since 1987 are unable to generate enough jobs.

The Great Depression of the 1930s which was marked by massive unemployment, poverty and food insecurity contributed to the Second World War with deadly human consequences. John Maynard Keynes, the British economist, realized that in times of economic distress fiscal policy – government increased spending – should be used as a tool to manage the economy.

Until the Great Depression, the assumption had been that the economy was self-regulated and the invisible hand of the market forces left to its own devices would automatically raise economic output and employment to optimal levels. Keynes who disagreed with this approach argued that during times of economic distress, the drop in aggregate demand for goods and services could cause further economic contraction and raise unemployment which the invisible hand could not handle. He suggested that it was government responsibility to kick-start the economy by borrowing and spending on public infrastructure projects – roads, schools, hospitals etc – so that the funds spent would raise economic growth, create jobs and reduce unemployment.

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Is Uganda’s new development plan dead on arrival?

Before we examine the emerging fear that Uganda’s new development plan may be dead on arrival, let us outline the background to, and major players in the death on arrival of NRM’s mixed economy ten-point program launched in 1986.

The serious development challenges of the 1970s marked by slow economic growth, rising inflation, unemployment and external debts undermined the Keynesian economic model based on state demand management with a focus on full employment and welfare benefits. The model was replaced by the neo-liberal economic model with inflation control as its principal goal. (It was feared that inflation rather than unemployment constituted a more serious challenge to governments).

The 1980s witnessed elections of conservative governments in developed countries including in the United States and United Kingdom. The leaders in USA and UK believed that governments were the problem and not the solution to development challenges. Consequently, they favored a return to the invisible hand of market forces and laissez faire capitalism. There was no room for mixed economy models because they contained elements of socialism and central planning.

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Donors are partly responsible for Uganda’s underdevelopment

Uganda’s economy since independence in 1962 has been driven by donors. Reports from the World Bank, United Nations Industrial Development Organization (UNIDO) and Commonwealth etc made recommendations that have driven Uganda’s economy and society. Dependence on donors for advice, funds, technical assistance and supervision has been particularly strong since the 1980s coinciding with the launch of the Washington Consensus or structural adjustment programs except for a short period between 1985 and mid-1987 when major donors withdrew support because of human rights violations, non-compliance with IMF conditionality and ideological differences. Therefore the donor community has been an integral part of Uganda’s development equation. It should therefore accept praise or constructive criticism as appropriate.

Contrary to popular belief based on GDP and per capita growth rates and macroeconomic stability, Uganda has become an underdeveloped country meaning that the standard of living of the majority of Ugandans has declined. Here are a few illustrations.

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