Uganda's labour market remains heavily informal, with 89.2% of employed persons earning a living outside the formal economy, according to the latest Labour Market Survey Report 2025 released by the Uganda Bureau of Statistics (UBOS).
The findings show that only 10.8% of workers are in formal employment, highlighting an economy where the vast majority operate without stable contracts, regulated incomes, or social protection.
The report indicates that informality cuts across all regions and sectors, though it is more pronounced in rural areas.
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In rural Uganda, 91.9% of workers are in informal employment compared to 85.8% in urban areas.
Even in urban centres, formal employment remains limited. Kampala, which records the highest share of formal jobs, still has only 26.5% of workers in formal employment, meaning nearly three-quarters remain in the informal sector.
Gender disparities are also evident. The report shows that 89.6% of female workers are in informal employment compared to 88.9% of males, indicating that women are slightly more affected.
The structure of the economy is a key driver of the trend. The services sector employs the largest share of workers at 50.5%, followed by agriculture, forestry and fishing at 37.1%, while industry accounts for just 12.4%.
In rural areas, agriculture remains dominant, employing 46.9% of the population, while urban areas are largely service-driven, with 60.4% of workers engaged in services.
The report further highlights the scale of subsistence work. Out of 10.5 million Ugandans aged 15 and above who are working, more than half are engaged in own-use production, mainly subsistence farming.
Analysts say this limits productivity, income growth, and broader economic transformation, as most workers remain outside formal wage systems.
Regionally, Karamoja recorded the highest level of informal employment at 96.8%, followed by Kigezi, Teso, and Bunyoro sub-regions.
Kampala registered the lowest share at 73.5%, although informality still dominates even in the capital.
The findings present a significant challenge for policymakers as Uganda continues to grapple with job creation and economic transformation.
Experts warn that without expanding formal employment opportunities and supporting the growth of small and medium enterprises, the country risks sustaining a labour market dominated by low-income and vulnerable work.
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