A new report released by the World Bank is calling for a streamlined informal sector, particulary investments in sectors that will create more employment in the greater Kampala metropolis, if Uganda is to realise socio-economic transformation.
The report which launched by Prime Minister, Ruhakana Rugunda at Pearl of Africa Hotel on Sunday is titled “From Regulators to Enablers: Role of City Governments in Economic Development of Greater Kampala”.
It explains the need for local city governments to work jointly to plan and implement policies, undertake infrastructure investments, and provide common services for the benefit of the country at large.
According the report findings, Greater Kampala which includes Mukono, Wakiso and Mpigi districts generates a third of the country’s Gross Domestic Product (GDP) and employs 46 percent of its formal workers.
But Kampala’s potential is constrained by the unregulated informal sector which has brought about tax evasion which deprives formal firms of their hard-earned profits, the inability for much of the informal sector (82% of firms) to grow and expand.
“To keep pace with its population growth and satisfy the expectations of its population for better quality jobs, Kampala must create jobs in sectors which will encourage industrialization and economies of scale,” the report states.
The World Bank recommends that Greater Kampala needs to generate more “right kind of jobs” that will sustain growth particulary in employment in sectors such as manufacturing which will accelerate the city’s transition from a market town to a production centre.
Another concerning discovery in the report is that the share of labour employed in specialized tradable sub-sectors remains negligible while some sub-sectors are declining.
For example, employment growth in large firms in the tradable sector has reduced by five thousand (5,000) jobs in the period between 2001 and 2011 in Greater Kampala.
“This is a cause for concern given that medium and large firms are not fulfilling their potential for creating higher value added jobs and the majority of people seem to be forced to engage in survival activities, whether or not there is a market for them”.
It adds that Kampala city’s ability to gradually develop alternative subsectors of specialization will be important to avoid a worsening in unemployment and informality levels.
At the launch, Christina Malmberg Calvo, World Bank Country Manager in Uganda said; “Over two-thirds of Greater Kampala’s businesses are informal. Local governments need to enable small and micro-entrepreneurs to access affordable, well-located land and premises, and provide public transport to link people with jobs and enterprises with customers”.
On his part, Sameh Wahba, World Bank Director, Urban and Territorial Development and Disaster Risk Management underscored the need for policy makers to take a long-term view of development of Greater Kampala–so that investments are structured to take into account the long-term development of the city.
“To do this, it is critical that the city governments that make up the Greater Kampala work together to make the Greater Kampala a productive as well as liveable city,” Wahba said.
The report recommends investment in transport and economic infrastructure, such as roads and markets, to improve access within the city and to markets, better land use and partnerships with the private sector to provide support services to local firms such as tax education and skills development.
The Government is currently finalizing preparation of an Economic and Development Strategy for the Greater Kampala under the leadership of the National Planning Authority.
The report is supported by the Economic Performance of African Cities, a World Bank-DFID partnership that is supporting four African cities including Kampala City to improve data collection, analysis and application of research on urbanisation.