A Generation Who’s Dreams Are Stolen: Our Ability To Set Uganda, World’s Economy Straight Will Be Determined By Today’s Young People

A Generation Who’s Dreams Are Stolen: Our Ability To Set Uganda,World’s Economy Straight Will Be Determined By Today’s Young People

By Laban Musinguzi Joshua

All parts of the universe from Europe, Asia to Africa have witnessed population pressures from this generation known as the YOUTH. A chain of events triggered by a wide range of reasons like unemployment, unreliable and outdated Infrastructure, unfavourable Labor market Policies and imbalanced rule of law comprising of weaker governance structures leading to inaccessibility to financial markets by this vulnerable constituency has seen some significant and reliable young people come up to create forums, coalitions and platforms used to converge a wide number of young people to create social economic transformation through listening to their ideas, concerns and stimulate change through offering a voice in decision making bodies.

It is important to note that young people are innocent bystanders in the global financial crisis, and yet they are paying the heaviest price for the policy mistakes that have led us to where we are today.  The young people will have to pay taxes to service the debts accumulated in recent years. Moreover, the country’s economy is threatened by intensifying strains in the shillings area, unemployment is still increasing and the most affected are the young people with evidence of youth unemployment reaching record levels in the country.

Laban Joshua Musinguzi: President Sustainable Development Goals (SDGs)

If the right policies are not put in place, there is a risk not only of a lost decade in terms of growth but also of a lost generation. Considering this, nearly half of all young people cannot find jobs. The young people in Uganda account for over 40% more of all unemployed people in Uganda.

It should be noted that young people tend to be hurt more by recessions than the rest of the labor force when economic growth slows, youth unemployment rises. As new entrants to the labor market they already face the most obstacles out of the many including less job-specific experience, which means more effort is needed in addition to on-the-job training.

When there is an economic downturn like what we are experiencing in Uganda, employers remain reluctant to hire inexperienced people as growth resumes. From a purely economic perspective, it is also easier for employers to lay off young workers than more seasoned ones, because their dismissal costs are lower. It’s important not to forget that youth unemployment has long-term consequences for economic growth because of the loss or degradation of human capital.

So what can be done? And what can the responsible MDAs like MoFPED, BoU do to help? At various youth community engagements, the young people have often asked me whether the Government of Uganda really cares about unemployment and the youth. Institutions like the Bank of Uganda have the mandate to promote national macroeconomic stability that have important consequences for youth unemployment and vice versa.

What has been happening during the last years, for instance, holds an important lesson for us here at the Youth Coalition for SDGs. Uganda had respectable economic growth rates of around 3%-5% a year on average during the past years. On the surface, this appeared to be quite successful but once looked beyond those numbers and took into account what is happening to inequality and to unemployment, it was quite clear that there were huge problems festering underneath.

So it’s not enough to simply look at the aggregate numbers, we have to look at what is underpinning them. If Uganda is going to have a revolution as a result of those underpinnings, that is clearly bad for macroeconomic stability.

 The Government of Uganda through responsible institutions has not focused on employment issues in the past that is why as the Youth Coalition for SDGs we are looking forward to working with others who have specific mandates in various important areas. We are forming strategic partnerships with various development partners like the United Nations agencies in Uganda with guidance from the National SDGs secretariat under the office of the Prime Minister to devise strategies that can help the Government of Uganda and the Private sector foster job creation.

The Youth Coalition for SDGs is looking at owning active dialogues with youth and youth-led organizations at regional, national and global levels in various sectors of the economy like Commercial Agriculture (crops, livestock, fisheries), Industrialization (Manufacturing and Mining), Services, ICT Innovations and Pubic Service to gain a better understanding of what is happening in the labor market. This being the biggest contribution the coalition can make towards reducing youth unemployment to restore economic growth as when the economy recovers, that’s when people will start to find jobs again.

For us to get Uganda and the world’s economy back to where it creates rather than destroys jobs, a number of steps should be taken. Where we have a problem of inadequate demand, the government should increase public spending to avert a depression and further support together with policies foster confidence in the future. But in the meantime, scarce fiscal resources must be used to preserve and further strengthen young people’s skills.

For Uganda’s case where we are facing obstacles to hire young people that are of more long-standing structural nature, the structure of product and labor markets often protects insiders, workers or companies in the end thus lacking domestic competition hampering the national economy’s ability to compete in international markets and hinders growth and job generation.

As part of its policy dialogue with various stakeholders, the Youth Coalition for SDGs is recommending measures to reduce labor market segmentation, lower barriers to competition (especially in the service sector), implement growth-friendly tax reforms and increase efforts in education and research and development. Such measures obviously need to be adopted for specific circumstances, but it’s essential that they be implemented as soon as possible.

As a country, we have mainly been running large external surpluses and this could contribute to solving the national youth unemployment problem by boosting domestic demand and purchasing more goods produced elsewhere. However, in the process, the government has used a lot of its resources and now we need to rebuild our fiscal buffers so as to sustain employment and redirect spending towards high-priority areas such as health, education and infrastructure even if the global environment deteriorates.

Another important factor in job creation is access to credit. Right now, in Uganda, the banks are not lending. With the continuing crisis in the housing market, this is putting a damper on credit growth. Other banks have big exposures to sovereign debt. All this has been answered through tightening lending conditions thus not surprisingly first affecting young entrepreneurs with fewer loans going to start-ups for example. That is why it’s important to recapitalize banks and more broadly restore confidence, so that financial institutions can get back to the business of lending and contributing to growth. However, many performing financial institutions in Uganda are lending but the loans don’t reach large segments of the population, particularly young people and would-be entrepreneurs and for this reason, expansion of the number of people who have access to credit is very important for employment.

For all the millions of young people in Uganda and the globe, a lot is at stake by 2030. If we do not succeed in putting the world economy back on the path to recovery, futures will be blighted, more dreams will be stolen and shuttered. So to solve the problems of youth unemployment, restoring national and global growth is crucial, as are policies to support job creation and credit. None of this can be achieved without global cooperation to achieve the 2030 Sustainable Development Goals agenda.

The writer is President-Youth Coalition For SDGs

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