Uganda’s Human Capital Crisis: Why Urgent Action Is Key to Vision 2040 Success

The Uganda Human Capital Development and Growth Review, jointly authored by the World Bank, the Ministry of Education and Sports, and the Ministry of Finance, Planning and Economic Development, provides an urgent and comprehensive evaluation of Uganda’s potential to convert its demographic momentum into economic transformation. As Uganda pursues its ambitious Vision 2040 and Ten-Fold Growth Strategy, the report underscores that the nation's success will be determined less by its physical infrastructure and more by its investment in people. Uganda’s current Human Capital Index (HCI) stands at just 0.39, meaning a child born today will achieve only 39% of their productivity potential due to deficits in education, health, and social systems. With the population projected to more than double to 104 million by 2060, 70 percent of whom will be of working age, Uganda faces a “now-or-never” moment to seize the demographic dividend through deliberate and far-reaching investment in human capital.

Education Expansion Undermined by Quality and Equity Gaps

Uganda was one of the first African countries to introduce free primary education through the Universal Primary Education (UPE) policy in 1997, which helped increase primary school enrollment from 2.6 million to 8.7 million by 2017. However, the education system is fraught with systemic inefficiencies and equity challenges. Although the average Ugandan child attends 6.8 years of school, they only gain 4.3 Learning Adjusted Years of Schooling (LAYS), indicating widespread learning poverty. Government spending on education is a mere 2.7% of GDP, far below the East African average of 4.2%, and most of that funding goes to salaries, which remain 37–42% lower than those for similarly educated professionals in other fields. Classroom overcrowding, rampant teacher absenteeism, and limited investment in school inspections and learning materials further hinder quality. Despite progressive curriculum reforms and donor-supported interventions like Early Grade Reading, their limited implementation and reach weaken their potential impact. At the same time, the reliance on out-of-pocket payments by households, exceeding government spending, exacerbates inequities, leaving many poor children, especially girls and those in refugee-hosting areas, at a disadvantage.

Health Gains Threatened by Chronic Underinvestment

Uganda has made significant progress in improving public health, particularly by reducing maternal and child mortality and increasing life expectancy from 46 years in 1990 to 68.5 years in 2024. Yet, the healthcare system remains deeply underfunded and heavily reliant on donor funding and household payments. Only 1% of GDP is allocated to health, and 83% of financing comes from external and household sources. While access to health facilities has improved, with 91% of the population living within 5 km of a health center, the quality of service delivery remains subpar. Just 34% of health sector vacancies are filled, essential medicines are chronically understocked, and service delivery platforms are hindered by poor sanitation, long wait times, and unmotivated or overburdened personnel. The country is also grappling with a rising tide of non-communicable diseases and frequent public health emergencies. Limited coverage of adolescent health, weak referral systems, and insufficient coordination at district and national levels have left health systems vulnerable, especially in rural and marginalized regions. Without a serious boost in health financing and institutional reform, Uganda risks losing the gains made over the past two decades.

Water, Sanitation, and Social Protection: The Missing Links

Water, sanitation, and hygiene (WASH) services are essential to public health and educational access, yet 12 million Ugandans still lack basic water supply, and 38 million lack safe sanitation. Alarmingly, only 56.8% of health facilities and 32.5% of schools have access to water. In Kampala, fewer than 17% of healthcare facilities are connected to a sewer system. Rainwater harvesting, the main water source for many institutions, is unregulated, and 97% of samples from storage tanks tested positive for E. coli. Meanwhile, the governance framework for WASH remains fragmented, with different ministries reporting data in silos and no unified oversight mechanism.

In parallel, Uganda’s social protection systems remain weak despite a robust policy framework. Only 3% of Ugandans benefit from government safety nets, and just 0.14% of GDP is allocated to social protection programs, far below Kenya and Rwanda. The lack of a modern social registry, digital payment systems, and adaptive programming leaves millions vulnerable to shocks. The Senior Citizens Grant and Northern Uganda Social Action Fund (NUSAF IV) have limited reach and sustainability, highlighting the need for systemic reforms and budgetary commitment to expand social safety nets and empower vulnerable communities.

Jobs and Skills: The Underused Engine of Growth

Uganda’s youthful labor force presents a promising asset, but it is currently underutilized. Over 50% of Ugandans aged 18–30 are classified as NEET, not in employment, education, or training. Most are engaged in subsistence farming or informal, low-productivity activities. A striking mismatch exists in the labor market: 10% of workers in low-skilled jobs have a tertiary education, while many high-skill jobs are filled by individuals with only primary-level schooling. Uganda has one of the lowest levels of value-added per worker in Sub-Saharan Africa. Meanwhile, over 90% of businesses are micro and informal, and the country has one of the highest business discontinuation rates in the world due to corruption, weak infrastructure, and lack of entrepreneurial support.

To address these challenges, the report outlines four “game changers”: implementing a focused set of accelerator interventions; gradually doubling human capital investments; boosting efficiency through data, incentives, and community engagement; and enhancing intergovernmental coordination through program-based budgeting. Together, these measures could unlock Uganda’s potential to transform its demographic advantage into a powerful engine for economic development.