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| Determinants of Youth Unemployment in Uganda a Case Study of Kampala District
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Kamugisha Nelson, Friday Christopher
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Abstract:
The study was about determinants of Unemployment in Uganda and it was guided by the following objectives: To find out the impact of population growth rate on youth unemployment, to find out the relationship between inflation rates on youth unemployment and to find out the relationship between foreign direct investment on youth unemployment. The study adopted a cross sectional research design in conjunction with descriptive data. This study was aiming at establishing the determinants of youth unemployment in Kampala district-Uganda. Quantitative data was used in the study to test the hypothesis posed in chapter one. The study used time series data from the period 1980 to 2020 for the components of Growth Domestic Product, namely; inflation, population growth rate, and foreign direct investment. The VAR model was used for estimation after undergoing time-series property. The time series data was descriptively analyzed to ensure normality of distribution. These included measures of central tendency (mean, median and mode) and a measure of variability (standard deviation, skewness and kurtosis). As a pretest for time series data, stationarity tests were carried out using unit root tests. If the data conforms to stationarity, a long run and short run relationship between the variables was established for purposes of policy recommendation in Kampala district, Uganda. Further, to prove the authenticity of the model and credibility of the empirical results, heteroscedastic tests, auto correlation tests were applied to ensure the stability of the model over. Keeping other factors constant, a one percent increase in foreign direct investment leads to 0.0.7655 percent increase in Growth Domestic Product. The p-value (0.0007) is less than 0.05 which implies that foreign direct investment has a positive significant effect on growth domestic product consistent with results obtained by Romanus & Dickson (2019) in Tanzania.Keeping other factors constant, a one percent increase in inflation leads to 0.07 percent decrease in growth domestic product. The p-value (0.0.509) is greater than 0.05 which shows that inflation have a negative significant effect on growth domestic product which is similar to the results obtained by Ebrima et al. (2019) for the Gambian context. Keeping other factors constant, a one percent increase in population growth rate leads to 0.0972 percent decrease in growth domestic product. The p-value (0.820) is greater than 0.05 which implies that population growth rate has a negative but insignificant effect on growth domestic product. R-squared is 0.2365 which signifies that 24 percent of the variations in growth domestic product are jointly explained by population growth rate, inflation rate and foreign direct investment. 24 percent is explained by other variables contained in the error term thus not included in the model. The R2 is high which implies that the data is fitted nicely thus a good fit. With rising population, increasing inflation rate and other concerning factors, Youth unemployment issue has taken its toll to greater height leading to several consequences which require forefront attention from everyone. It is very evident from the number of arrests made by the central police station that juvenile delinquency and related crime rates are on the rise. Such social issues might seem feeble, but one should not forget that rise in such situations will impose acute strain on the existing facilities and may hamper progress in other areas of development. The problem of Youth unemployment is not a new issue that emerged overnight. There are various measures and mitigating methods that are being undertaken by government and concerned agencies. Nevertheless, the severity of the problem overrides the measures and assistances in curbing down these issues. In other words, there are gradual increases in number of such issues which results from other factors with unemployment as another indirect factor contributing as an evident challenge. With their diverse exposure to various ideas, places and behavior of the people, there are number of literatures and studies, which can be a guide and reference to design our own programmes and activities to curb down such issues through education reforms, social reforms, Policy recommendations and many other practical activities that they have imprinted in their studies and research documents. One major finding derived from such study is that one of the vital complex issues that we need to deal is changing the social mindset of the people along with economic development of the country. It is pertinent from the analysis that youth unemployment alone did not specifically contribute to emergence of negative social issues or such as substance abuse, prostitution, theft, battery and so on. There are also other significant factors such as rising population growth rate, inflation rate and foreign direct investment, influences from friends, weak youth activities, and many others, which contributed to rise in such socially unfavorable situations such as youth unemployment in the country. With changing time it has become very crucial for any policy maker or implementers to come up with vigorous plans and activities to curb such issues especially amongst the youth. There are many strategies and policy recommendations in place working towards curbing down such situation in the country: 1. Implementation of the recommendations highlighted in the youth Policy, National Employment Policy and Economic development policy at the earliest possible way; 2. The Jobseekers Assessment Report 2012 reveals that 56 % of the jobseekers were not selected in the available jobs due to lack of experience, training and low academic performance. Therefore, implementing various youth related productive activities such as volunteering services, internship programmes, temporary paid jobs, entrepreneurship trainings and skilling up for aspiring young entrepreneurs and so on. 3. A partnership /collaboration between the governments, the public and the community to work together, instead of leaving everything to the government.
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