ECONOMIC IMPLICATIONS OF UGANDA’S POPULATION STRUCTURE

POSITIVE IMPLICATIONS

  1. High market potential due to the high population growth rate. The steadily growing population provides a large market potential.
  2. High potential for labour force due to high population growth rate. There is a possibility for the provision of cheap labour because many people are unskilled and semi-skilled.
  3. Potential for massive future investment because of the dominant young population.
  4. High tax potential.This is due to the high population growth rate that provides labour force to be taxed by the government.
  5. It initiates efforts to work harder to sustain the pre-dominantly dependent population.
  6. The government is awakened to its responsibilities of providing necessary infrastructure and this leads to increase in output.
  7. The young are usually innovative and creative. This gives room for new discoveries leading to technological progress.
  8. High potential for increased resource utilization. The increase in population is a stimulus to development by providing a challenge to the investors and the government.
  9. Reduction in per capita social overhead costs.The high population growth rate reduces per capita social overhead costs for instance reduction in the cost of providing infrastructure.
  10. Encourages labour mobility. The high population growth rate forces the skilled and unskilled labour to search for better opportunities either within the country or outside the country in order to earn a living.

NEGATIVE IMPLICATIONS

  1. Low labour productivity. This arises due to the fact that a big portion of the population is semi-skilled or unskilled which reduces the size of national income.
  2. High dependence burden thereby limiting savings.This is due to the dominance of the young age group that strains the working population.
  3. Results into unemployment and underemployment. This is because of the high population growth rate that results in excess labour supply compared to job openings.
  4. Limited domestic market/ low effective demand. This is because many live on less than a dollar a day implying that they are very poor and are not able to buy many goods and services which scare away investors.
  5. External resource dependence for example on foreign man-power. The population of Uganda is mainly semiskilled and this Uganda relies on expatriates in different fields leading to higher foreign exchange expenditure.
  6. Worsens balance of payments problems. This is because the high population growth rate leads to increase in import requirements to supplement domestic supply.
  7. Effective planning for the population becomes difficult. The steadily rising population makes it difficult for the government to make long term plans. This is arises because economic planners fail to accurately predict the population size over the years to set realistic development objectives and targets.
  8. High government expenditure on provision of services. High population growth rates require massive investments in social and economic infrastructure like in education, health, transport and housing. This results into budgetary deficits and declining quality of service delivery.
  9. Environmental destruction. High population growth rates have devastating effects on the environment. For

Uganda’s case, a high population size has caused over use of land, forests, hillsidesand swamps especially in city centres like Kampala, Jinja, Mukono and other areas. There are also high social costs in form of pollution and congestion.

  1. It results into brain drain. The structure of Uganda’s population reveals that a big size of the population is unemployed and this forces many skilled people to seek for alternative employment in other countries.
  2. High rates of rural – urban migration with its negative consequences like prostitution, high crime rates and congestion. This is due to the high population growth rates in rural areas that cause poor livingconditions in such areas.
  3. Quick depletion of resources due to their over exploitation.
  4. Perpetuates income inequality. In Uganda, the middle income group owns the means of production and distribution whose demand continues to grow with increasing population. Consequently, the middle income group continues achieving rising standard of living whereas the majority of population does not.

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