The 2014 census resultsillustrate Uganda’s potential to realize a demographic dividend if it invests in jobs creation. A demographic dividend arises out of a fast decline in fertility and mortality (demographic transition) resulting into a large cohort of economically active people, which in turn creates an opportunity for accelerated economic growth. However, this assumes that the burgeoning economically active population can be absorbed into the labour market through gainful employment and subsequently contribute to production.Below, we explore Uganda’s performance on major indicators (fertility, human capital, jobs creation) that have triggered demographic dividends elsewhere – e.g. in East Asia.

Uganda has experienced declines in fertility, mortality and dependency ratio

As pointed out earlier, a demographic transition is a necessary precursor for a demographic dividend; the 2014 census results suggest that Uganda could be on a slow but steady path towards a demographic transition - moving from a period of high mortality and fertility to one of low fertility and mortality.

Figure 1: Demographic changes, 2002-2014

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Source: Uganda National Housing and Population Census Report (UBoS 2016)

Undeniably, in the past two decades, Uganda has made some progress –albeit slow- in reducing the fertility rate; using total fertility rate (TFR) as a measure, Uganda reduced its TFR from 7.1 in 1990 to 5.8 children per woman in 2014. This in part can be attributed to the increased uptake of family planning; which saw the unmet need for family planning reduce from 38 percent in 2006 to 34 percent in 2011. Similarly, great strides have been achieved in reducing mortality- particularly child and infant mortality. Although Uganda narrowly missed out on achieving the MDG targets on infant and child mortality, it has made good progress in ensuring that more children are able to survive to adulthood. The infant mortality rate was estimated at 53 deaths per 1000 live births in 2014, animprovement from 87 deaths per 1000 live births in 2002 and 122 in 1991. The under five-mortality rate was estimated at 80 deaths per 1000 live births in 2014, an improvement from 156 deaths per 1000 in 2002 and 203 in 1991 (UBoS 2016). The dependency rates have also lowered from 110 in 2002 to 103 in 2014 implying that for every 100 economically active people, there are 103 dependents. Decreasing dependency ratios present an opportunity for increased investments by freeing up resources that would have otherwise been utilized for consumption.

Improvements in human capital development – case of education

Access to quality education is essential for harnessing the demographic dividend; knowledge, skills and capabilities of the future labour force will determine the extent to which Uganda will take advantage of the demographic transition and ensuing new opportunities. Uganda has made steady progress in expanding access to education. With the introduction of Universal Primary Education (UPE) in 1997 and Universal Secondary Education (USE) in 2007, the enrolment levels both at primary and secondary levels have considerably gone up. Although gender parity has been achieved at primary level, there are still stark gender differences (in favour of boys) in educational attainment at secondary and tertiary levels, despite the fact that girls’ education beyond secondary level has a significant effect on fertility reductions and prepares them for the job market. However, quality of education provided remains an issue; there is a skills mismatch between skills possessed by the youth and those required in the labour market.

Job creation seems to be the missing link

Job creation is essential for harnessing of the demographic dividend. To realize a dividend, the Ugandan economy must absorb the large number of young people who will reach working age over the next several decades. This requires creating a large number of jobs, particularly decent jobs that allow workers to earn enough and live a decent life and save to buffer against economic shocks.

However, the Ugandan economy still faces a number of challenges, namely, a lack of absorptive capacity (resulting in unemployment), a lack of diverse and decent job options (the majority are still stuck in subsistence agriculture and low paying jobs in the informal sector), and slow growth in the private sector. According to the Uganda School to Work Transition Survey, unemployment rate among young people (15-29 years) increased from 13.3 percent in 2013 to 18 percent in 2015. Underemployment is even a more serious concern with the majority of Ugandans in vulnerable employment. Moreover, the 2014 census results estimate that the proportion of the population which is neither in employment nor receiving education/training was 58 percent reflecting a substantial unutilized labour force.

Call to action

Through concrete policy actions in family planning, health, education, gender equality, labour market policies and accountability, Uganda has the potential to produce large and positive economic returns known to as the “Demographic Dividend” (see figure 2). The most pressing and immediate action will be addressing unemployment by addressing both the supply and demand side bottlenecks of the labour market. Skilling will help the young people to take advantage of new opportunities and also become job creators. Furthermore, promotion of industrialization will go a long away in creating decent jobs and absorbing the burgeoning young population.

Figure 2: Policy wheels for creating and harnessing a demographic dividend

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Source: Adopted from Harnessing the Demographic Transition PRB Engage presentation



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