Employment-Intensive Investment in Uganda

Web page | 10 December 2014

Historical Information

Labour-based road works
The Ministry of Works, Transport and Communications (MOWTC) introduced labour-based routine maintenance of the trunk roads using "lengthsmen" (local people responsible for maintaining specific lengths of road) and local labour contractors recruited from the villages close to the roads. Some 5500 km of trunk roads have been put under labour-based routine maintenance. The ILO through ASIST helped the Ministry in training key staff and in the development of contract management procedures and documents for this new maintenance system.

The ILO was responsible for the preparatory work for the Feeder Roads Component of the World Bank-supported Transport Rehabilitation Project, under the Ministry of Local Government (MOLG), which started in 1995. Trained local contractors carried out rehabilitation and maintenance works using labour based methods in four districts on a trial basis. The Nordic Development Fund financed the technical assistance component, which was provided by Norconsult A/S whilst ASIST provided advisory and monitoring services for project implementation.

Labour-based Policy Promotion Committee (LAPCOMM)
Under the ILO/DANIDA Multilateral Cooperation Programme, a three-year project: "Support to the Labour-based Policy Promotion Committee" was launched in September 1997. The Committee consisted of the Ministry of Local Government (MOLG), the Ministry of Planning and Economic Development (MPED) and the Ministry of Works, Transport and Communication (MoWTC). The project aimed at promoting the effective use of local resources, and involved developing policies for the integration of labour-based approaches into national planning process. The Government of Uganda committed funds towards the implementation of the project and included it in its Public Investment Plan.

Study on the Macro-economic Dimension of Labour-based Roadworks
In 1998, a study was carried out to evaluate the potential of using employment-intensive technology in the rehabilitation of feeder roads to generate employment and combat poverty. The study concentrated on the economic aspects rather than technical ones, since it is assumed that most rehabilitation work on feeder roads can be carried out by labour as well as by the use of heavy machinery. The central hypothesis of the study was that labour-based approaches are viable and offer high employment potential, as well as greater indirect benefits to the national economy than the conventional, equipment-based technology would. In order to test this hypothesis, empirical evidence was compared from feeder roads rehabilitation projects carried out in Uganda between 1993 and 1997.

The hypothesis was confirmed at several levels. The main conclusions indicate that a switch towards more labour-based methods could generate very significant benefits for the poor in the form of employment opportunities, and for the country in terms of GDP and foreign exchange savings:

• Labour-based methods are cheaper than equipment-based methods: in direct financial terms they are 18% cheaper for full rehabilitation of feeder roads and 50% cheaper for spot rehabilitation;
• In economic terms, labour-based methods are even more advantageous: 38% cheaper for full rehabilitation and 60% for spot rehabilitation;
• In terms of costs, labour-based works are competitive as long as the unskilled daily wage does not exceed USD 4; the current rate in rural areas is USD 1.2;
• The employment generation effect is much higher for labour-based than for equipment-based work: in the labour-based projects studied the proportion of the cost spent on wages, mostly for the unskilled, ranged between 44% and 60%, against 3% - 8% in equipment-based works.

The macro-economic model showed that the indirect effects were even greater than the direct effects; for each job directly created another 2 jobs are generated elsewhere in the economy through a multiplier effect. An investment of US$ 23 million in feeder roads rehabilitation would generate 107,000 jobs (directly and indirectly) if carried out with labour versus the 36,000 jobs created if carried out with equipment (the GOU current investment in feeder roads is estimated at Ug Shs 30 billion per annum). Due to the savings in foreign exchange from not having to import heavy equipment from abroad, the fiscal deficit of the investment would be 37% less with labour-based methods than with equipment.

The Ugandan labour market grows by at least 300,000 young people each year. With the formal sector being able to absorb less than 100,000 of them, the study concludes that there is a strong case for making the wider application of labour-based methods in infrastructure works a dynamic element in a strategy for employment creation and poverty eradication.

Masulita Urban Upgrading Development Project
The post-war "Masulita Development Project", which started in 1993, was funded by DANIDA and implemented and managed by the Ministry of Planning and Economic Development (MPED) and the Labour-Based Intensive Work Unit (LIWU), with technical advice from the ILO. The objectives of the project were (i) to rehabilitate the infrastructure related to health, social and market services (ii) to promote rural development projects and small business opportunities and (iii) to create a sustainable development fund for the business promotion. The urban upgrading infrastructure project aimed to establish work methods suitable for community-based upgrading of the infrastructure in unplanned settlement areas and to test the use of community contracts in Kampala. The project assisted the community by providing proper drainage to an area prone to regular flooding.

The project constructed 3.2 km of lined flood drains in close collaboration and with support from the Kampala City Council and the residents of the project area. The community members carried out all activities (paid labour) and received on-the-job training. The United Nations Development Programme provided the investment funds for the project. Through the project, the infrastructure in Masulita was notably improved and the people provided with access to knowledge and capital. The project ended in mid 1997. Unfortunately, due to lack of maintenance and cleaning of the drain, large parts of the main drain became blocked after the completion of the project. This implies that much more emphasis has to be placed on the establishment of sustainable maintenance agreements with the communities concerned.

Further reading

• Support to the Labour-based Policy Promotion Committee: Terminal Evaluation Mission
J. Mutabazi, Government of Uganda, ILO, Danida, 2000.
• Project of the Government of Uganda UGA/97/ Support to the labour-based policy promotion committee. Project document. Government of Uganda, 1997.
• An opportunity for employment creation, labour-based technology in roadworks – the macro-economic dimension. SETP No. 5. ILO
• Masulita rehabilitation project. Project review report
Ms Wanyama, J. Ssekatatwa, E. Lyby, M. Kuiper, Government of Uganda; DanEduc A/S; ILO, 1995.