Structural constraints undermining Uganda's labour market absorption

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As Uganda joins the rest of the world to mark International Labour Day 2026, today (May 1) calls have intensified for co-ordinated state and non-state efforts to address the structural barriers to decent work for all.

This is because Uganda’s labour force participation remains relatively low at 43.2%, according to government statistics. This is largely attributed to structural constraints in labour market absorption, with youth exclusion particularly pronounced at about 42.6% of those aged 15–24 not in employment, education, or training (NEET).

The 2025 Labour Market Survey revealed that unemployment is higher among females than males, underscoring persistent gender disparities.

The report notes that Uganda’s working-age population stands at approximately 26.4 million (58.1%), with an unemployment rate of about 12%.

National Labour Day celebrations, where President Yoweri Museveni is expected to preside as chief guest, are being held at Nkoyoyo Boarding Primary School Grounds, Matale in Buikwe district, under the theme: Safeguarding Uganda’s Progress: Empowering the Workforce and Promoting Decent Work for Competitive Enterprises. 

Uganda’s labour market remains predominantly informal, with the sector contributing about 54.5% of GDP and employing nearly 88% of the workforce.

In a statement ahead of Labour Day, the gender ministry emphasised the importance of reflecting on the latest national data to better appreciate both opportunities and challenges within the labour market.

According to the 2024 National Population and Housing Census, Uganda’s population stands at 45.9 million, with over 73% below the age of 30, highlighting a youthful demographic structure that presents both promise and pressure in generating sufficient productive and decent jobs.

The state minister for labour, employment and industrial relations, Esther Davinia Anyakun, noted that the majority of workers remain in vulnerable employment with limited access to labour protection.

She stressed that gaps in awareness and enforcement of labour rights continue to expose many to hazardous conditions and workplace abuses.

“Social protection coverage remains limited. Although 3.2 million workers are registered under retirement benefits schemes, most under the National Social Security Fund (NSSF), only a fraction are actively contributing, leaving many exposed to income insecurity in old age,” she said.

On productivity, Anyakun acknowledged mixed performance citing that while industry and services have exceeded targets and agriculture has improved, overall labour productivity remains below both regional and global averages.

In purchasing power parity (PPP), real GDP per three persons employed in Uganda stood at $6,162 (shillings 23.1 million) in 2021, compared to $10,278 (shillings 38.5 million) for Sub-Saharan Africa and $41,510 (shillings 155.7 million) globally.

Despite these challenges, Anyakun highlighted Uganda’s steady progress toward middle-income status, citing expanded monetisation of the economy, reduced poverty levels, and a strengthened legal and policy framework guiding national development.

She pointed to initiatives such as the National Apprenticeship Programme (NAP), which since 2022, has supported 1,134 apprentices and 242 graduate volunteers, achieving an employment transition rate of 71.73%.

Other programmes include the Jua Kali initiative to formalise informal businesses, youth skilling schemes, and the Labour, Employment and Productivity Reporting Programme (LEAP).

“This year’s theme emphasises that Uganda’s future progress hinges on a workforce that is productive, empowered, protected, and engaged in competitive enterprises.”

Anyakun said the creation of decent work and productive employment opportunities remains central to the attainment of National Development Plan IV (NDP IV), Uganda Vision 2040, which seeks to transform the country into a competitive upper-middle-income economy.”

About Labour Day

Labour Day is a global commemoration that honours the struggles and achievements of working people. Its origins trace back to the labour movement in the United States during the late 19th century. In October 1884, the Federation of Organised Trades and Labour Unions declared May 1, 1886, as the deadline for instituting the eight-hour workday.

As the date approached, unions across the country rallied and called for strikes. On May 1, 1886, thousands of workers took to the streets demanding “eight hours for work, eight hours for rest, eight hours for what we will,” a slogan that captured the essence of their struggle. Chicago, America's industrial hub, became the epicentre of this movement.

Tensions escalated on May 3, 1886, when police fired on striking workers, killing two. The following day, a peaceful rally at Haymarket Square turned tragic when a bomb was thrown at police, sparking gunfire that left seven officers and four workers dead, with dozens more injured.

The Haymarket Affair became a defining moment in labour history, symbolising both the sacrifices and resilience of workers in their fight for justice. In 1889, an international federation of socialist groups and trade unions declared May 1 as a day of remembrance for the Haymarket martyrs.

Since then, International Labour Day has grown into a global observance, celebrated in many countries as a public holiday.