By Prof. Augustus Nuwagaba, Deputy Governor, Bank of Uganda

One of the things being discussed globally is the impact pathway to gainful employment as a driver of economic transformation. Policies aiming at job creation must be premised on the formalisation of informal work, skills-mix development, and digital transitions.

Did you know that the informal sector employs over 60% of the Ugandan workforce? Absolutely true, and the International Labour Organization (ILO) estimates that approximately 2 billion workers, of the world’s adult labor force, work in informal employment.

But here is the more interesting fact: the informal sector lacks job protection. Workers in the informal economy often operate without legal recognition, labor rights, social security benefits (like healthcare, pensions, or unemployment insurance), and stable job contracts. This results in significant vulnerability, poverty, and social exclusion.

Formalisation of the informal sector is considered a game-changer because it involves access to social protection, decent work, economic empowerment, and increased productivity.

Green and digital transitions are reshaping the global economy. To achieve decent work and a just transition, it is crucial to invest in worker training, and promote inclusive policies that address the skills gaps and potential job displacement caused by automation and new technologies.

That said, job creation is not about numbers, but it’s about quality. Low-quality jobs provide limited long-term benefits, whereas quality jobs ensure fair wages, job security, social protection, and career growth. Workers earning sustainable incomes are more likely to invest in their families, health care, and education, creating a more skilled and resilient workforce.

In Uganda, there are several programs aimed at empowering young people to start and grow their own businesses. With that, we can collectively address some of the pressing issues for the country, which are mainly unemployment and poverty.

The author is the Deputy Governor Bank of Uganda