Opinion: Financing Uganda’s Potential Demographic Dividend

By Mugobera Ronald

The International day of the African Child-16th, June 2019 comes only three days after the reading of Uganda’s budget for the financial year 2019/20.  The African continent does not only have one of the highest global population growth rates but also has a young population. In 2015, 19% of the global youth population was in Africa. In Uganda, the current total population is estimated at 40.3 million by the Uganda Bureau of Statistics with an annual population growth rate of 3.3%.

Of the total population in Uganda, 59.8% are below 20 years of age between 0-20 years. This shows that Uganda’s population is largely young, youthful and highly dependent.  Apparently, this age structure erodes possible chances of capital accumulation and hence affects investments. However, this offers potential benefits of providing the much needed human capital or labour to spur economic growth and development in the country. With the country’s fertility rates showing a declining trend from 6.9 in 1995 to 5.4 in 2016 coupled with an improvement in life expectancy from 50.4 years in 2002 to 63.7 years in 2014, there is more need to invest in human capital development so that Ugandans can live longer quality and productive lives.

As the age structure changes from the current highly dependent children to majority working class in the near future, economic activity in the country will be boosted contributing to expansion in the country’s Gross Domestic Product, people’s purchasing power will be enhanced and subsequently contribute to domestic revenue mobilization. This is because the working class then will spend on consumption of goods and services on which they will pay different taxes.

Like children in other Sub-Saharan African countries, Uganda’s children experience various challenges among which include poverty, hunger, malnutrition, and inadequate access to socio-economic services like education, safe drinking water, access to quality healthcare, sexual reproductive health services among others.

This is evident in the performance of some indicators in different sectors for instance, the national average infant mortality rate at 50 deaths per 1,000 live births.  Some districts have their infant mortality rates way above the national average for instance Sembabule district at 72 deaths per 1,000 live births, Kyegegwa and Buliisa districts with 80 deaths per 1,000 live births each, and Lyantonde district at 88 deaths per 1,000 live births.

Though the country has witnessed improvements in under five mortality from 183 deaths per 100,000 live births in 1986 to 64 deaths per 100,000 live births in 2016, it is unfortunate that an estimated 200,000 children below the age of five die annually in Uganda due to preventable illness according to the State of the population report 2018 by Uganda Bureau of Statistics.

In order for Uganda to harness a demographic dividend, there should be concerted efforts to do meaningful investments in education and skills, health, job creation, among other children and youth capacity building sensitive ventures.


In the health sector, most interventions targeting the youth like sexual reproductive health services and immunization have been largely left to the mercy of donor agencies which is unsustainable.

In the education sector, several initiatives to make access to education inclusive for all by government like Universal Education and Universal Secondary Education are in place. Enrollment in primary grew from 2.5 million pupils in 1997 to 8.3 million in 2015. The increase in enrollment figures has been met with challenges such as dropouts which has subsequently culminated into 56% of the enrolled pupils failing to complete primary education. The failure to complete primary level education affects transition rates to secondary level or other higher levels of learning or skilling. This compromises on the future economic productivity and earnings of those that fail to progress to higher academic levels.

In the recent past financial years, Uganda’s budget allocations have prioritized infrastructure developments for instance, the Works and Transport sector takes the biggest portion of the financial year 2019/20 budget of Shs. 6,406.8 billion which is 16.2 percent of the total national budget. The health and education sectors combined have been allocated Shs. 5,814.7 billion which is less than the works and transport sector budget by Shs. 592.1 billion. Much as infrastructure is central to boosting economic activity in the country, there is need for government to strike a balance between infrastructure and human capital development. A healthy and competent human capital resource is needed to complement infrastructure investments in an effort to achieve sustainable economic growth and development.

The International Monetary Fund in its latest edition of the economic update on Uganda noted that the country needs to create at least 600,000 jobs annually in the next ten years to accommodate the many youths and get them out of poverty. This also calls for the need to invest in the citizens by improving health and education outcomes. Additionally, there is need to create an enabling environment for the private sector to set up meaningful investments and provide jobs to the majority youths.

The writer is an Economist-Civil Society Budget Advocacy Group

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