An economist’s take on graduate unemployment in Uganda

BY RICHARD SEBAGGALA And ISAAC MUSINGUZI

The liberalization of higher education in Uganda was the beginning of change in the sector. Many higher education institutions have been opened, contributing to the increase in the number of graduates in the job market.

Despite the impressive numbers of graduands, the issue of employment has attracted considerable interest in the recent past. For instance, it is estimated that Uganda’s general youth unemployment rate stands at 32.2 percent, while that for degree holders is 36 percent, and rising.

Statistics from the Labour Department in Uganda’s Ministry of Gender, Labour and Social Development show that more than 400,000 job seekers enter the labour market each year. Therefore Uganda, like many other African countries, is faced with the major challenge of how to absorb the large numbers of unemployed graduates in order to reduce unemployment.

Economic studies on rate of return to higher education have demonstrated that higher education is still the best return on human investment, especially in countries like Uganda where graduates are few. In spite of the gloomy statistics, we must stop perpetuating the fallacy that joining the university is a bad decision and a waste of resources.

For that reason, it is prudent for graduates, parents, the government and other stakeholders to think about the following economic perspectives:

-Economists argue that graduate unemployment is structural in nature. That is, there is a mismatch between supply and demand in the labour market characterized by the co-existence of both unemployment and job vacancies. In such situations, those with the right skills and competencies get employed faster.

Therefore, when you graduate, do not sit back. If there are opportunities to attain practical skills, go for them. This will help you to get your dream job sooner than later.

-In less developed labour markets such as Uganda, those with the right information, at the right time, get employed. Insufficient information about labour market opportunities is a barrier for your employment.

Information is power. It is possible that someone is looking for someone like you and is failing to locate you. It is possible to get information through your personal and family networks, print and online mass media.

It is a form of investment that requires zeal and determination if you want to get your dream job. If it means buying newspapers and going through the job advertisements, writing and dropping applications here and there, or subscribing to job alert platforms, please do it,  it will reward you one day.

Economists have also observed that many graduates are unemployed not because they cannot find a job, but because they have higher expectations. Whereas it is okay to have high expectations, keep the reality in full view, especially before you get working experience. Lower your expectations about wages, salaries, the type of work, or placement. Your priority for a start is to start work.

Many firms do not want to hire the youth because they have asymmetric information regarding the productivity of young graduates. Therefore, employing the inexperienced graduate is a risk firms do not want to take. To circumvent this barrier, getting an internship or voluntary slot after university is a potential strategy to get employment in an organisation of your choice.

Finally, in Uganda many people have blamed the supply side of the labour market (graduates and tertiary institutions) for the unemployment rates, thereby blaming the graduates for their plight. Higher institutions of learning are being blamed for producing graduates who lack skills and competencies.

However, given the economic conditions that are characterised by a non-expanding economy, it is plausible to argue that graduate unemployment is due to limited job opportunities. Hence, graduates need to start embracing self-employment. There are many opportunities.

At the household level, parents or guardians should provide start-up capital to their sons and daughters, for income generating activities. Family businesses are something we need to take seriously if we want to create jobs for our children.

At macro-level, we urge the Government also to be pro-active and invest in programmes that create jobs for graduates’ irrespective of the course studied.

The authors are lecturers in the Faculty of Business and Administration

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