President Museveni’s 2013 Labour Day Speech

HE The Vice President

The Chief Justice

Rt Hon Speaker of Parliament

Rt Hon Prime Minister

Hon Ministers

Ambassadors and High Commissioners

Hon Members of Parliament

Your Highnesses the Cultural Leaders

All workers of Uganda in your different categories;

Ladies and gentlemen

Today, Uganda joins other countries to celebrate the economic and social achievements made by workers; and to recognize their role in the development of our nation. The theme for this year’s Labour Day celebrations is “Consolidating and Recognizing the Worker’s Role in Production and Development”. The theme comes at an appropriate time, when Uganda has come to a stage of consolidating the economic and social gains made over the last 25 years.

When the National Resistance Movement Government came to power in 1986, the entire economic and social infrastructure of Uganda had been destroyed. Industries were no longer operating. The value of education had been undermined. Foreign investments were non-existent. The rate of inflation was 240%. Public service delivery was very poor. The social fabric of the country had been completely destroyed. In such an environment, workers had neither the incentives nor the conditions necessary for increasing production of goods and services; let alone any vestiges of purchasing power.

I am, however, glad to say that under NRM stewardship over the years, there has been a complete turn-around in all the sectors listed above. The education sector, which has a direct bearing on the quality of workers produced, has grown by leaps and bounds; having been revamped and liberalized. There are now many public and private sector schools, colleges, universities and other institutions of higher learning. Uganda has moved from a mono-university to a multi-university environment. Currently, the country boasts of 28 public and private universities, with a combined student population of 120,000. Close to 40,000 students graduate every year. The establishment of Mbarara University of Science and Technology is a clear indicator of the kind of graduate that we would like to see coming out of our Universities into the labour market.

Owing to positive economic growth, Uganda is now poised for socio-economic transformation. The country has witnessed an average growth rate of 7.5 percent per annum over the last 25 years. This translates to a total GDP in 2009/10 of shs 34.6 trillion as compared to shs 3.5 trillion in 1986. As a result of this economic performance, household incomes have increased. Poverty levels have been brought down, from 56 per cent in 1992, to 23 per cent in 2010.

Impressive as these gains are, the NRM Government has not sat on its laurels. It continues to aggressively sensitize and empower the people to fight poverty by actively participating in income-generating activities. Government is aware that although our GDP per capita is now at the equivalent of US$ 540, a lot more remains to be done to maintain the steady road to socio-economic take-off .

As a result of Government policies, the economy has experienced changes in the sectoral composition of the Gross Domestic Product (GDP). GDP share by sector was 23.9 percent Agriculture, 24.6 percent for Industry and 45.4 percent for Services in 2009/10. Ten years ago, in 2000/01, Agriculture accounted for 34 percent of GDP, Industry for 18 percent and Services for 48 percent.

Human Resource Development

Apart from the notable, economic, social, political and industrial development, the country has also become richer in terms of human capabilities, and quality of life. Uganda’s life expectancy today is 52 years compared to 45 years in 2003. Our major challenge now is to ensure that the fruits of this development reach those most in need, through equitable distribution of resources, opportunities and benefits. We also have the challenge of further developing human capabilities to address the political, economic and social challenges that come with development.

Industrial Production

The industrial sector has picked up from the 1970s ashes of ruin. Uganda is now able to produce goods for local consumption, as well as for export within Eastern and Central Africa. The investment climate in Uganda continues to improve. This has led to increased inflows of Foreign Direct Investment (FDI) as well as Domestic Direct Investment (DDI) by local Ugandans, translating into increased employment opportunities. FDI has also led to the acquisition of new and better technology, improved quality of goods, advanced knowledge and skills, etc.

Now Government has embarked on strengthening a new sector, the oil and gas sector. With this new development, Ugandan workers have increased employment opportunities, both in main-stream and down-stream activities.

The new investments in the country have not only led to increased production, but also to the introduction of new machinery and production systems, such as the use of computers in the production process. Our support to new technologically-driven processes does not mean neglecting the role of labour in production. The use of technologically-advanced industries requires the workforce to be equally trained. The challenge for Government and employers is, therefore, the imperative to set up skills development programmes. These are essential for equipping workers with relevant skills to manage production processes.

The NRM Government has played its role through making education and training more accessible to all Ugandans through UPE and USE. The support of science education in higher institutions of learning has also contributed significantly towards this need. The onus is therefore on the employers and workers organizations like NOTU, COFTU, FUE, UMA, etc. They should put in place their own skills’ development programmes. We in Government shall reciprocate by supporting the idea of setting up labour centres as demanded by labour unions.

As noted above, Government efforts have led to increased investment and to new, technologically-advanced production processes. They have added to knowledge- and technology- transfer from developed countries.

You may have the best machines, but if the people do not have positive attitudes towards work, the machinery will be useless. Ugandans are not doing so well in this area. That is why you see so many of our brothers and sisters from Kenya, South Africa and other countries taking up top jobs in Ugandan banks, hotels and manufacturing firms. Poor work ethics and attitude to work on the part of the indigenous workers is rampant in this country. So is poor management.

There is no substitute for training. Workers must, simply, be trained. Equally, the leadership of any firm must exhibit high levels of competence and management skills. The training is not just for the workers to know how to operate machinery. Workers must also be aware of the consequences of not doing their job right, the first time. If you, the employers, do not inculcate into the workers the concepts of productivity, competitiveness and intolerance of waste, then the training is only tackling part of the problem. If, on the other hand, leadership is absent, then you cannot expect lower cadre staff to exhibit the conduct expected of them.

I, therefore, call upon all employers to prepare their employees by establishing in-house training programmes that orient them towards a positive mindset in their employment. In-house training programmes should stress the importance of patriotism as well as that of positive work ethics. Workers must be trained to build synergy through promoting team-work and cooperation in any job at hand. In-house training programmes must aim at upgrading skills while promoting entrepreneurship. Workers must also be trained on how to face up to the challenges encountered in each job; and in each job setting.

Labour productivity and Uganda’s competitiveness The NRM Government knows that in order to make the country competitive internationally, it must improve productivity at the national and enterprise levels. Uganda’s

international competitiveness is to be judged from the ability of the economy to achieve sustained high rates of economic growth as measured by the annual change in GDP per person.

A country’s ability to achieve economic growth and to improve the standards of living of its citizens over time, depends almost entirely on its ability to raise its output per worker. Improved labour productivity is the key to generating more and better quality jobs, better remuneration and greater wealth. How do we as a country fare in this respect? Uganda’s labour productivity is the lowest in East Africa. Here productivity suffers from inadequate skills, the prevalent negative attitude towards work, poor managerial practices and poor working conditions.

The State of Uganda Population Report 2010 revealed that one Kenyan worker does the same task as six Ugandan workers. Tanzania’s labour productivity was four times higher than that of an average Ugandan. Uganda’s labour productivity was found to be very low with value added per worker. In comparison to other countries, Uganda’s value added per worker is 68 percent lower than that in India and 96 per cent lower than that in China. This situation must change.

The highest labour productivity per person ever reached in the world was US$ 65,480 in the United States, followed by China (US$58,605) and Ireland (US$56,701). There is need for Government to put emphasis on improving productivity and public value in the services. Everyone in the workplace, and all entrepreneurs, must be aligned towards value addition, increased productivity and better performance.

A number of factors contribute to the competitiveness of a country. These include education and the technical ability of labour; as well as the quality of management and the levels of science and technology application in that country. Equally important are its capital stock and the cost and availability of finance to industry and commerce. The ability to attract international capital is another critical factor. Also of great importance is labour market efficiency; and the openness of its trade policy. Last but not least, a country’s macro-economic environment plays a big role in its competitiveness.

For Uganda to pursue a successful competitiveness and productivity strategy, a large number of coordinated changes in different areas are simultaneously needed, rather than a few high profile initiatives in one or two areas. For successful competitiveness and productivity in Uganda, coordinated changes would have to be made in the country’s various institutions, such as the National Planning Authority, Uganda Investment Authority, Uganda National Bureau of Standards,

Uganda National Council for Science and Technology, Uganda Industrial Research Institute, the National Agricultural Advisory Services programme; the Competitiveness and Investment Climate Strategy; Uganda National Roads Authority, etc.

Our producers can increase productivity in a number of ways. The most common of these is through increased use of machinery and computerization which minimize the tasks that would otherwise be performed manually by human labour.

Constraints on workers’ effectiveness

Government has identified a number of obstacles to effective participation of Ugandan workers in production. First and foremost is an inappropriate education and training system that produces job-seekers rather than innovative job-creators. Secondly, there is a mismatch between skills acquired and the requirements of employers. The third bottleneck is lack of investment in the training and development of workers by their employers. Workers end up having obsolete skills and knowledge in the face of an increasingly technologically-advanced labour market, with new production processes.

Other bottlenecks include the high growth rate in the labour force, which cannot be absorbed by the few sectors operating in the economy. Inadequate infrastructure such as roads and railways which limit access to markets; and lack of access to electricity and water for production are other constraints. The use of old and obsolete production technology undermines workers’ productivity as does working in

unhygienic and hazardous environments. The latter pose a threat to workers’ lives. Low levels of incomes, poor health and living conditions for the workers, as well as weak labour market information systems play a big role in reducing workers’ productivity.

Government Strategic Interventions

In order to address these and other bottlenecks, and create more employment opportunities for workers, Government is committed to urgently attaining the following strategic interventions.

a) Education and Training System

Government is continuously reviewing the education system in order to eliminate the current mismatch between the skills of graduates from universities and other institutions of higher learning and the needs of the job market. The advent of international out-sourcing requires workers who have the capacity to handle international assignments from

their Call Centres based in Uganda. Training programmes that prepare our graduates for the labour market, with appropriate soft skills, will be organized and made a prerequisite for one to get a job. It will therefore be mandatory for all graduates to attend these programmes after graduation.

b) Conducting a National “Manpower” Survey

The last report on the “manpower” situation in Uganda was produced in 1989 after the National Manpower Survey. In order for us to better educate, train, develop and utilize the country’s human resources however, we must have regular

assessments of the skills situation in the country. Accordingly, I have directed the Ministry of Finance, Planning and Economic Development, to provide resources in the coming budget 2011/12 to the National Planning Authority for the National Manpower Survey.

Before the main Survey, a process is already underway to register all unemployed but skilled workers in the country; especially those who hold certificates in professional subjects such as carpentry, plumbing etc. Also to be registered are diploma and degree holders. We shall then be able to put in place programmes that will prepare them for externalization of their skills. This exercise is expected to be completed in July .

c) Externalization of Labour

Many countries abroad are looking for skilled workers to be employed in their industries and other sectors of their economies. Countries such as China need teachers of English while the demand for nurses in the United Kingdom is very high. Government has therefore put in place a programme on externalization of labour. Through this programme, 9,989 Ugandans have, in the last five years, got employment in various countries — especially in the Middle East. In this respect, the biggest challenge includes the need to equip our people with the soft skills required to work in international environments. Equally challenging is the task of streamlining and regulating the activities of the companies involved in exporting labour.

Recent reports of exploitation of Ugandans working in Iraq and other Middle East countries are taken seriously by Government. Inquires are being carried out. If the reports are true, then those responsible will be brought to book.

d) Implementing Existing Policies

i) National Youth Policy

The population of Uganda is increasingly becoming younger. It is estimated that by 2002, the proportion of children, those under 18 years, was at 56 percent, having increased from the 1969 figure of 51 per cent. It is also estimated that over two million literate youths are jobless; while another two million are underemployed. It is also estimated that 50 percent of economically active young people are not engaged in income -generating employment.

At 4.7 per cent, Uganda has one of the highest youth unemployment rates in the world. Government will, therefore, implement the National Youth Policy and put in place interventions aimed at creating more job opportunities for the youth. It is expected that the current focus on large infrastructure development projects in energy and roads, will create job opportunities for our youth.

ii) The Employment Act No 6 of 2006

The Act requires all districts to recruit labour officers to provide technical advice to employers. Only 30 districts have, however, complied with this law. We shall therefore ensure that all district authorities recruit labour officers in accordance with the law.

e) Support for institutionalized entrepreneurship development training

Government shall provide regular health checks on small and medium enterprises (SMEs) and report on their performance. It will provide regular business counseling and establish a National Productivity Centre. It will also promote Start-Ups and youth entrepreneurship products including graduate empowerment. As part of its entrepreneurship development training, Government will promote value chains. This means promoting cluster development and promotion of corporate governance within community-owned economic clusters, to increase corporate participation.

f) Increase access to finance

Credit guarantee schemes will be created, while training in financial literacy, loan implementation and SME financing will be promoted. Government will also encourage the development of Joint Venture Businesses.

g) Increase protection of workers through improved compliance

The following actions will be taken in support of protection of workers. Central and local governments will recruit labour officers. Labour inspectors will be trained and re-trained. The Decent Work Programme will be implemented to strengthen compliance and administration of labour laws and policies. Lastly, Government will strengthen the Externalization of Labour Programme.

h) Role of labour and workers organisations

The role of labour unions and employers’ organisations in promoting increased workers’ participation in production is appreciated. These organisations are, however, still weak. For example, they do not take adequate care of some of our workers such as women and those engaged in agricultural activities. About 75 per cent of the workers in Uganda are in rural areas. They do not have access to the labour unions based here in Kampala. Similarly, workers’ organizations have not done enough to eliminate the structural segregation of women into low-paying sectors. Half of the employed women are in the three lowest-paying sectors — agriculture, household jobs and subsistence mining and quarrying — compared to 33 percent of men.

We shall therefore strengthen the tripartite arrangement of Government, Workers, Employers and social development partners. Organizations such as the National Organization of Trade Unions, the Central Organization of Free Trade Unions, and the Federation of Uganda Employers will continue to get Government support, including support in setting up Labour Centres. We shall continue to engage them on matters related to workers.

j) The National Employment Policy for Uganda

Unemployment constitutes a major challenge in Uganda. The overall unemployment rate is constantly changing. It was 3.2 percent in 2003. It dropped to 1.9 percent in 2006 and rose to 4.7 in 2009/10. The reality of the problem on the ground reveals a much more challenging situation than what is reflected in the figures. Scarcity of job opportunities has led to unplanned rural-urban migration and to high competition in a highly narrow labour market.

The Uganda labour market is faced with a notable mismatch between what the education system offers and labour market requirements. Information on the labour market, both in public and private sectors, including the large informal sector is severely constrained by lack of resources. Employment and labour services are not spread throughout the districts.

The Employment Policy that I am launching today addresses these and other critical challenges facing the country namely: the attainment of full employment, coupled with decent work and equitable economic growth. Fast growth in opportunities for permanent employment in the private sector, remains the most effective route to sustainable poverty eradication. The main thrust of the policy is, therefore, the generation of productive and decent jobs for Ugandans.

Ladies and gentlemen, I now launch the National Employment Policy For Uganda.

I thank you.

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