The government has expressed concern over high youth unemployment, low labour productivity, and widespread informality in Uganda's labour market, warning that structural reforms are urgently needed to unlock inclusive economic growth.
This was revealed by the Minister of State for Labour, Employment and Industrial Relations, Esther Davinia Anyakun, while addressing the media ahead of the 2026 International Labour Day celebrations.
The national celebrations will be held on Friday, 1 May, at Nkoyoyo Boarding Primary School Grounds in Matale, Buikwe District, under the theme: "Safeguarding Uganda's Progress: Empowering the Workforce and Promoting Decent Work for Competitive Enterprises."
According to government data, Uganda's population stands at 45.9 million, with more than 73% aged below 30 a demographic profile officials say presents both opportunity and pressure to create sufficient jobs.
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However, the labour market indicators remain weak.
The 2025 Labour Market Survey shows an unemployment rate of about 12%, while labour force participation remains low at 43.2%.
Youth exclusion is particularly high, with 42.6% of young people aged 15-24 not in employment, education, or training.
Government also noted persistent gender disparities, with unemployment higher among women than men, reflecting what officials described as structural inequalities in the labour market.
The minister further revealed that Uganda's economy remains heavily informal, with about 88% of the workforce operating outside formal employment.
The informal sector contributes an estimated 54.5% to GDP, but workers in this space largely lack social protection and labour safeguards.
Social security coverage also remains limited. Although 3.2 million workers are registered under retirement benefit schemes, most are not actively contributing, exposing a large section of the workforce to income insecurity in old age.
On productivity, government data shows mixed performance across sectors, but overall labour productivity remains significantly below regional and global benchmarks. Uganda's GDP per person employed stood at US$6,162 in 2021, compared to US$10,278 in Sub-Saharan Africa and US$41,510 globally.
"These gaps underscore the need for targeted skilling, enterprise development, productivity enhancement, and labour market reforms," Anyakun said, noting that such interventions are central to Uganda's long-term development agenda.
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She added that government is implementing several programmes aimed at improving skills and formalisation, including the National Apprenticeship Programme, youth skilling initiatives, and efforts to expand social security coverage.
"Uganda's future progress hinges on a workforce that is productive, empowered, protected, and engaged in competitive enterprises," she said.
The ministry also confirmed that pre-Labour Day activities, including workplace inspections, public awareness campaigns, and labour conferences, are ongoing in Buikwe District ahead of the national celebrations.
