By Nuwagaba Arthur
Recently, high-ranking Ugandan government officials, including the President, and various ministers, expressed criticism of the labour externalization program, which has enabled many Ugandans to secure employment abroad, primarily in the Middle East. While concerns about worker exploitation and limited oversight are valid, a critical question remains unanswered: what viable alternatives exist for the hundreds of thousands of Ugandans facing rampant unemployment and underemployment?
Uganda’s unemployment rate is alarmingly high, particularly among the youth, with estimates indicating that over 13.3% of Ugandans aged 15 to 24 are unemployed. With more than 400,000 young people entering the job market annually, the economy struggles to absorb them into the formal sector. In this context, labour externalization has provided jobs for over 200,000 Ugandans in the past decade, with key destinations being Saudi Arabia and the UAE. Ugandan workers find employment in sectors such as domestic work, security, and hospitality.
Labour externalization has emerged as a vital solution, offering opportunities for Ugandans to secure jobs abroad where their services are in high demand. It is ironic that while government officials criticize this program, they have yet to present clear, viable alternatives for integrating this significant workforce domestically. We must acknowledge that labour externalization has become one of Uganda’s largest sources of foreign exchange.
According to the Bank of Uganda, Ugandans working abroad remitted approximately $1.1 billion (UGX 4.1 trillion) in 2022. These remittances significantly contribute to the economy, allowing families to invest in education, healthcare, and small businesses, thereby alleviating poverty. A 2020 study by the Ministry of Gender, Labour, and Social Development found that over 60% of families with members abroad reported improvements in their quality of life.
Beyond remittances, workers abroad acquire new skills and exposure to diverse work environments, returning home with enhanced competencies in areas such as customer service, technical skills, and business management. These experiences not only make them more employable but also equip them to start successful businesses locally. It would be beneficial for critics to research how many returnees have leveraged these skills to launch thriving businesses and contribute to the local economy.
This data could provide a clearer picture of the positive long-term impact of labour externalization. Some critics suggest that youth should join the agriculture sector instead of seeking employment abroad, citing that it employs over 70% of Ugandans. However, this advice ignores the harsh realities of underfunding and limited opportunities in agriculture. In the 2023/24 budget, only 3.7% (approximately UGX 654 billion) was allocated to the agriculture sector, highlighting the disconnect between rhetoric and actual investment.
While concerns about the mistreatment of Ugandan workers abroad are legitimate, they do not invalidate the labour externalization program. Instead, the government should focus on strengthening oversight and ensuring better protection for Ugandan workers through bilateral agreements with destination countries. Uganda could learn from countries like the Philippines, which has successfully leveraged labour externalization for economic growth.
In 2022, remittances from Overseas Filipino Workers (OFWs) reached $35 billion, constituting 8.9% of the country’s GDP. Similarly, India received approximately $87 billion in remittances in 2022, accounting for 3.1% of its GDP. Bangladesh’s remittances reached around $21 billion in 2022, representing 6% of GDP and contributing to economic stability and infrastructure development.
Labour externalization is not a perfect solution, but it is critical in addressing Uganda’s unemployment crisis. The benefits such as foreign remittances and skills development—far outweigh the challenges. Critics must move beyond simply pointing out problems and propose real, actionable alternatives that can create sustainable job opportunities at home.
Uganda cannot afford to overlook the potential of a program that empowers its citizens and makes significant contributions to the national economy.
The writer is NRM Cadre and PhD student in Business Administration [email protected]
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