KAMPALA, Uganda — Nine in 10 Ugandans are trapped in a “shadow economy” of informal work, according to an explosive new report from the Uganda Bureau of Statistics that warns of a deepening job crisis and chronic labor underutilization.
The Labour Market Survey 2025, released Thursday at UBOS headquarters, reveals a ticking time bomb for the nation’s economy. Nearly 90 percent of the workforce operates without the safety of formal contracts, social security or basic regulatory protections, leaving millions in a state of professional and financial precariousness.
While 11.8 million people are technically employed, the headline figures mask a desperate reality. UBOS Executive Director Chris Mukiza said the survey was initiated to meet the “increasing demand for more frequent labour statistics” and to guide “employment-focused initiatives for inclusive economic growth.” He urged policymakers to use the data to address the structural imbalances that continue to hinder the labor market.
The crisis is most visible in the soaring rates of labor underutilization. While the official unemployment rate is cited at 12.2 percent, the broader measure of employment distress hits 41.6 percent. This figure includes the unemployed, the potential labor force and those in jobs that fail to meet their basic needs.
The burden falls most heavily on the nation’s youth. Among those aged 15 to 19, the composite measure of underutilization reaches a staggering 58.3 percent. This generation of workers is increasingly funneled into low-productivity roles, with 37 percent of youth engaged solely in subsistence agriculture.
Gender and regional disparities further fuel the crisis. Male labor participation stands at 59.5 percent, far outpacing women at 43.4 percent. Geographically, the formal economy has retreated into the central region, leaving rural areas to grapple with underutilization rates as high as 43.9 percent. Sub-regions like Bukedi and Teso are at the breaking point, with some measures of employment distress exceeding 50 percent.
To document this informal landscape, UBOS researchers navigated 1,035 enumeration areas to sample 4,951 informal establishments. The data shows that trade and food services are the primary absorbers of this informal labor, accounting for over half of all such business employment.
The formal sector offers little relief, employing a mere 2.37 million people in a country of 26.4 million working-age adults. Even these positions are under threat, as the report recorded the loss of more than 46,000 formal jobs due to layoffs and downsizing during the survey period.
