University Of Groningen
P.O.Box 800, 9700 AV Groningen, The Netherlands.
An inquiry into how observed and noted constraints both influence and are influenced by culture in the provision of skills to the
private sector in Uganda.
by:
T.E Kajwaara
S 1427660
This thesis was written in partial fulfillment of the requirements for obtaining the Degree of Master of Science in Human Resource Management.
Supervisors:
Dr. P.H. van der Meer Dr. E.H. Bax
Groningen, July / August 2005.
DEDICATION
To my late father
Acknowledgements
I would like to take this opportunity to whole heartedly thank a number of people who have helped me through thin and thick to get to accomplish this stage of my academic life.
First of all, I would like to pay tribute to the Dutch government that has supported me throughout this study, socially and finances. I appreciate the guidance of my supervisor, Dr.P.H. Van der Meer for the tireless effort and time he put in assisting me to get this piece of academic work reach a final stage.
My gratitude also goes to Dr.E.H.Bax, the convener of this study and coordinator of the MSc HRM Programme, whose positive criticism helped me work hard and through which I came to learn a lot. I want to thank Dr. Justine Horgan, who encouraged me to go ahead with my research topic and spent many hours printing out and searching databases for relevant articles and reports for me.
I acknowledge the learning experiences of Dr.Ben Emans, Dr.Peter.H.van der Meer, Dr.G.van der Vegt, Dr.Marco de Witte, Professor Rienk Goodijk, Professor Caroline Quispel and Professor Janka Stoker. I have to wholeheartedly point out how much, their teachings, meetings, workshops, contributed to my academic status and it is due to their dedicated service that I was able to make it.
Mere words are inadequate to express my gratitude to Ms. Glaudemans Marjorieke and Mr.Tijn.F.L.Heerkens who dedicatedly supported me, morally, spiritually,
psychologically, and most of all financially. I feel I really have no words for them, I just pray to God to bless them in all their endeavors. Were it not for their heartfelt support, I do not believe I would have made it either. My grateful thanks also go to
Ms.Rothengatter.M.Lake for her time to guide me on preliminary admission procedures to the University of Groningen, my promise to her that I will make it what so ever, is finally realized, I thank her so much for her assistance and encouragement. Not forgetting Ms Anneke Toxopeus of the International Students’ Service Center, whose countless support has contributed a lot to my success in this study, I thank you whole heartedly.
I would like to thank all my friends in the “International Students’ Bible Study group”, who became my family and have supported me over the years through their amazing and good humour, their prayers, love, comfort and company.
Finally, I am most grateful to the Almighty God who has kept me alive and healthy enough to see me through my academic struggle. I acknowledge that it is through his will but not mine that I have made it, thank you Lord. May he bless you all richly.
ACRONYMS
“A”LEVEL Advanced Level FS Formal Sector
GDP Gross Domestic Product GOU Government of Uganda
ILO International Labour Organization IMF International Monetary Fund IS Informal Sector
JASPA Jobs and Skills Programme for Africa KY Kabaka Yekka
MFPED Ministry of Finance Planning and Econ. Develop.
MOES Ministry of Education and Sports MSE Micro and Small Enterprises NGO Non Governmental Organization
“O”LEVEL Ordinary Level
PEAP Poverty Eradication Action Plan PS Public Sector
PTC Primary Teachers College
SAP Structural Adjustment Programme SME Small and Medium Enterprises UCC Uganda College of commerce
UNDP United Nations Development Programme UPC Uganda People’s Congress
UPK Uganda Polytechnic, Kyambogo UTC Uganda Technical College VTI Uganda Vocational Institute WB World Bank
List of Charts and Figures.
Fig.1 ... 10
Chart 1 ... 13
Chart 2 ... 14
Fig. 2 ... 28
Chart 3 ... 42
Table of contents
Acknowledgements... 3
ACRONYMS... 4
List of Charts and Figures………5
Abstract ... 7
CHAPTER 1 ... 8
1.1 Introduction:... 8
1.2 Research Methodology, scope and limitations ... 12
1.2.1 About Uganda ... 12
1.3 The Performance of Uganda’s economy at the macro level ... 13
1.4 Uganda’s data profile ... 14
1.5 Justification of Research ... 16
1.6 Research Objectives... 17
1.7 Main question... 18
1.8 Defining Culture………..18
CHAPTER 2 ... 21
2.1 Problem Statement ... 21
2.2 Lack of Human Capital ... 23
2.3 Education and Culture vs Economic development: ... 29
2.4 Higher Economic Development... 32
2.5 High taxes and raw materials... 35
2.6 Lack of ready Markets and Limited space ... 36
2.9 Hypothesis... 37
CHAPTER 3 ... 38
3.1 Specific questions ... 38
CHAPTER 4 ... 41
4.2 Educational structure and skills provision ... 41
4.2 A Summary of the Educational Structure in Uganda... 42
CHAPTER 5……….44
5.1 CONCLUSION... 46
Reference: ... 47
Abstract
The socio-political and economic factors that underlie Private Sector performance and development in Uganda are often obscure; culture is one of the leads of these factors, as it is seen to influence each and every sector in the shifts and systems. This Study focuses on the constraints facing the private sector in Uganda and how the observed constraints influence or are influenced by culture visa-avis the UK and the Dutch Systems.
The Study is organized in the following way: Chapter 1 Introduces the study. In Chapter 2 for the focus is on the problem and its analysis and conceptual framework; Chapter 3 gives a historical background and the literature review of the Private Sector in Uganda.
Chapter 4 reviews the training programmes in Uganda plus the cultural influence in the said programmes and those who deliver them while Chapter 5 entails the conclusions, Suggested Solutions and/or recommendations.
The methodology used in this study is a general review of Uganda while picking out some specific localities like Kampala which has some relevant data to support the findings. This study is based on the use of secondary data, policy makers’ reports, research papers, internet and text books on the subject.
CHAPTER 1 1.1 Introduction:
Much as it is always the goal of national governments to productively engage their citizens for national developments through employment, the challenge to this prospect has always been and still remains job creation. In this realm, an area that has aroused interest in the developing world and especially Africa has been the private sector (PS) which is divided into two parts as in the case of Uganda, the formal sector (FS) and the informal sector (IS). The former is normally associated with registered enterprises while the later is associated with unregistered enterprises that have ease of entry and exit, small start-up capital requirements, labour-intensive and usually family owned. According to International Labour Organization report on African updates in 2000, the estimates were that 78% of non-agricultural employment was in the informal sector and 61% in urban employment which is respectively much associated with the formal sector and the same sector generated 93% of the new jobs (Chen et al.,).
The prominence of the PS becomes more pronounced in Uganda with the advent of privatization in the late 1980s and early 1990s when Structural Adjustment Policies began being implemented. According to the indications pointed out by Tukahirwa (1998:68) the public sector was the biggest formal employer but with the advent of privatization, more jobs were lost as the new owners reduced on what they considered excess staff. In the same period of late 1980s and 1990s, there was a retrenchment exercise in the civil service that lead to a large pool of unemployed persons. Many of
those that had lost their jobs in the formal public enterprises ended up joining the informal sector as the only alternative and there by making it emerge as an important economic and employment sector in the country. Further to that, the labour force has been increasing at an estimated 3.4 percent per year (Haan, 2002). With this kind of trend, the private sector has been responsible for the employment of 85% of the working population; (see Government of Uganda annual report , 1998) which exhibits that kind of trend that therefore demands attention.
While the terminology, PS, has been used in broad terms to include micro and small enterprises, the interest of this study is to have a general analytical synthesis on culture skills training programmes and organizational performance in Uganda with the segment of the private sector (PS) which covers mainly the informal sector (IS) and the formal sector (FS) as constituents respectively.
The analytical synthesis is aimed at defining the general view on Organizational and societal culture and structure in Uganda, and how it influences performance. Geert Hofstede (1997) gives an insight of the difference between Organizational and national cultures. Based on his findings, this paper will allocate the above issue to the exact stance at which is meant to influence the other or whether they supposedly go hand in hand.
Geert Hofstede (1997,p.182) shows the nature of cultural differences: the national, occupational, and organizational levels, and this would subject this paper to use this example to show that culture has an influence at each and every stage hence rendering it a fact that can not be ignored. This is shown in the book of Geert Hofstede (199, p.182,
Fig.1
The Nature of Cultural differences: the national, occupational and Organizational levels
This illustrates how cultures influence personnel’s right from the family level, to school level, occupational and workplace level, to organizational level and finally to a National level, this therefore signifies the fact that cultures have a lot to do with personnel and organizational performance at large which is the epitome of this paper. Geert Hofstede (1997, p.182;fig.8.1), it is illustrated that at the national level cultural differences reside mostly in values and less in practices, but practices on the other hand, are learned through socialization at the work places, which most people enter as adults, that is with the bulk of their values firmly in place. For occupational values the place of socialization is the school or university and the time is in between childhood and adulthood hence skills and training play an important role in this case.
However, practices should be considered to be the core of an organization’s culture as for organizations, employees’ values are differed more according to criteria like the
Values
Level Place of
socialization.
Family
School
Workplace Organization
Occupation Nation
Source: Geert Hofstede; Cultures and Organizations, software of the mind 1997, London.
nationality, age, and education of the employees than according to their membership of the organization per se.
The values of founders and key leaders undoubtedly shape organizational cultures, but the way these cultures affect ordinary members is through shared practices. Founders- leader’s values become member’s practices and these in turn would be viewed as organizational culture dimensions such as; power distance, individualism-collectivism, masculinity-femininity, and other uncertainty avoidances. In the due course, people are passive themselves as avoiding risks and therefore making only a limited effort in their jobs which Geert Hofstede terms as process-oriented cultures. The reverse is true, Hofstede calls it result-oriented cultures where people perceive themselves as
comfortable in unfamiliar situations and put in maximum efforts, this will not however, grant the researchers a cause to attach a bad or good label to both the later and the former.
At a later stage, the study will narrow to analyze organization culture and performance in the private sector drawing much of its influence to the culture of skills training,
curriculum follow ups, early school stages, sources of training, training programs and career decisions and guidelines and try to show how it may affect the performance in comparison with the developed world at a glance. The above, play a vital role because changing collective values of adult people in an intended direction is extremely difficult, if not impossible, Geer Hofstede (1997). Values do change, but not according to
someone’s master plan. Collective practices, however, depend on National or
organizational characteristics like structures and systems. With the above foundation
facing organization performance in the private sector in Uganda with more views on the informal sector segment. The question in this case therefore would be:
What are the constraints facing the provision of skills to the Private Sector in Uganda? How has culture contributed to these constraints?
1.2 Research Methodology, scope and limitations 1.2.1 About Uganda
Before embarking on the discussion of training constraints in skills provision in Uganda, I will give an overview of Uganda.
Uganda was a British Colony from 1876 as a British protectorate till October the 9th 1962 when the British officially handed over power to the indigenous Uganda People’s Congress (UPC) and Kabaka Yekka (KY) as the ruling parties led by Milton Obote and the then Kabaka Mutesa respectively. Since 1962 to date, Uganda has had 9 presidents, that is in the period; 1962-1986. This led to a stinking political unrest, save for the last 15 years where Uganda is seen to have headway towards a sense of development.
Uganda is one of the poorest countries in the world. Per capita income in 2004 was about US$ 260. Life expectancy at birth remains low: 43 years in 2002, compared to 47 years in 1990. Similarly, infant and child mortality has not improved much over the same period and stays to date at around 88 respectively 150 per 1,000 live births.
Nevertheless the country's firm commitment to poverty reduction, as spelled out in its Poverty Reduction Strategy, and the World Bank's and other Development Partners' contributions led to a couple of development results, which brought the country closer to reaching the Millennium Development Goals.
According to the World Bank reports and the World Development Indicators database,
• HIV/AIDS adult prevalence declined significantly over the last decade from about 18 percent in the early 1990s to 6.1 percent in 2003.
• Access to safe water increased from 54 percent in 2000 to 65 percent in 2003 in urban areas and from 50 percent in 2000 to 55 percent in 2003 in rural areas.
• Net enrollment rates for primary schooling increased from 62.3 percent in 1992 to 86 percent in 2003.
• Total youth literacy increased from 75 percent in 1995 to 81 percent in 2003.
• The gender gap (ratio of girls to boys) in primary and secondary schooling improved from 93 percent to 99 percent since 1992 and from 67 percent to 86 percent since 1997 respectively.
Chart 1
1.3 The Performance of Uganda’s economy at the macro level
Since the 1990's, the performance of Uganda's economy at the macro level has been impressive:
• Real GDP growth since 1995 averaged 6.7 percent and was 5.9 percent in 2004, with a projected growth rate of 5.4 percent in 2005.
• Inflation decreased from over 33 percent in 1990 to an average 3.5 percent since 2000, however, lately showing an increase to 5.9 in 2004 (estimated to be 5.9 in 2005).
The above will not do any harm to prompt me to give the whole data profile on Uganda as presented by the World Bank country reports under the World Development Indicator database. See full data profile of Uganda below.
Chart 2
1.4 Uganda’s data profile
Uganda Data Profile
1999 2002 2003
People
Population, total 22.6 million 24.6 million 25.3 million
Population growth (annual %) 2.8 2.8 2.7
Life expectancy (years) 42.1 43.1 43.2
Fertility rate (births per woman) .. 6.0 6.0
Infant mortality rate (per 1,000 live births) .. .. 81.0
Under 5 mortality rate (per 1,000 children) .. .. 140.0
Child immunization, measles (% of under 12 mos) 57.0 77.0 82.0 Prevalence of HIV, total (% of population aged 15-49) .. .. 4.1 Literacy rate, adult male (% of males ages 15 and
above) 76.7 78.8 ..
Literacy rate, adult female (% of females ages 15 and
above) 55.6 59.2 ..
Primary completion rate, total (% age group) .. 64.0 63.0
Primary completion rate, female (% age group) .. 59.0 58.0 Net secondary enrollment (% relevant age group) 14.6 14.2 ..
Environment
Surface area (sq. km) 241.0
thousand
241.0
thousand 241.0 thousand Internal freshwater resources per capita (cubic meters) .. .. 1,542.7
CO2 emissions (metric tons per capita) 0.1 .. ..
Access to improved water source (% of total pop.) .. 56.0 ..
Access to improved sanitation (% of urban pop.) .. 53.0 ..
Economy
GNI, Atlas method (current US$) 6.5 billion 6.0 billion 6.2 billion GNI per capita, Atlas method (current US$) 290.0 240.0 250.0
GDP (current $) 6.0 billion 5.9 billion 6.3 billion
GDP growth (annual %) 7.9 6.8 4.7
GDP implicit price deflator (annual % growth) 0.3 -3.9 10.1
Value added in agriculture (% of GDP) 38.4 31.0 32.4
Value added in industry (% of GDP) 19.9 21.6 21.2
Value added in services (% of GDP) 41.7 47.5 46.4
Exports of goods and services (% of GDP) 12.3 11.9 12.3
Imports of goods and services (% of GDP) 24.4 26.5 26.4
Gross capital formation (% of GDP) 19.4 19.7 20.7
Revenue, excluding grants (% of GDP) 11.7 12.2 ..
Cash surplus/deficit (% of GDP) -1.2 -4.6 ..
Technology and infrastructure
Fixed lines and mobile telephones (per 1,000 people) 5.1 18.1 32.7 Telephone average cost of local call (US$ per three
minutes) 0.2 0.2 ..
Personal computers (per 1,000 people) 2.5 3.3 4.0
Internet users (per 1,000 people) 1.1 4.0 4.9
Paved roads (% of total) 6.7 .. ..
Aircraft departures 3,000.0 300.0 300.0
Trade and finance
Trade in goods as a share of GDP (%) 31.2 26.5 28.8
High-technology exports (% of manufactured exports) 10.5 12.4 7.8
Net barter terms of trade (1995=100) 120.0 87.0 ..
Foreign direct investment, net inflows in reporting
country (current US$) 140.2 million 186.6 million 194.2 million Present value of debt (current US$) .. 1.3 billion 1.9 billion Total debt service (% of exports of goods and services) 13.8 6.3 7.1
Short-term debt outstanding (current US$) 131.7 million 158.5 million 148.4 million
Aid per capita (current US$) 26.1 25.9
Source: World Development Indicators database, April 2005
The methodology used in this study is a general review of Uganda as a whole while picking out specific localities such as Kampala district which has some relevant data to support the discussion.
The scope of the study looks at the review of the existing literature on the private sector, mainly narrowing the analytical synthesis to the concerns in the Informal sector and the micro and small enterprise sector segments in the Private sector as a whole. This
synthesis, also takes a look at the societal and organizational cultures and their influence on the performance of the said segments and the whole sector respectively, with the major focus being the provision of training and skills development.
The study takes a significant look at some of the challenges faced by the sector and attempts to identify existing solutions and suggest some as will be observed in the recommendations and solutions section.
There are limitations to this study in its capacity to obtain relevant up-to-date data on Uganda. However, secondary sources of data will be used as the main source of information through use of institutional documents and publications, the Internet and research reports. Besides the limitations, personal errors may be occurred of which I will accept the responsibility due. However, am highly convinced that this study will
contribute to the existing literature on the broad discussion of the private sector though there will be no pretence in any way that the study tends to be exhaustive.
1.5 Justification of Research
While investigating the problems and/or constraints faced by private sector as mentioned above, the study under takes the interest for a closer look at the cultural influence on performance in the sector previously mentioned above, mainly through training and skills development as a paramount foundation in the development of the sector. Without
growth in the private sector as anticipated, it is most likely that there will not be jobs created to absorb the said work force roaming the streets in search for job opportunities.
According to Makokha (2001), economic liberalization, a component of the structural Adjustment Programme (ASP), was meant to lead to the expansion of private ownership of public enterprises, limit the government role in the economy, create headway for the
availability of more jobs and bring the situation to a realization of the property-owning middle class but was not the case, as it did not happen.
Having realized the depressing character of performance in the formal or public sector and some segments of the private sector in creating more jobs, the possibility could only arise in the private sector by putting more focus on the MSE segment of the private sector. This segment seems to be much neglected as it is indicated by Bangasser (2000) in Chen Matha, Renana Jhabvala and Francis Lund (2000) Supporting Workers in The Informal Economy: a Policy Framework, ILO, Geneva.
This seems to be justifiable therefore, by engaging in an exploration through which the private sector could be assisted to grow and this could be by providing efficient and effective training, having a thorough scrutiny on cultural norms, values, rules and laws, state policies and regulatory systems that are to do with registration, acquiring credit and/or loans, information on markets, entrepreneurial development and application of modern technology (see Balunywa Waswa: 1998, Fapohunda and Ado, 1988:212.).
1.6 Research Objectives
• To analyze and discuss the existing institutional interventions and cultural influence in providing of skills development in the private sector.
• To investigate the role culture plays in skill development problems the private sector in Uganda encounters.
• Drawing an overview on how and what role culture has played or does play in the Ugandan institutions of learning towards, skill development or advancement.
• The connection between, cultural influence in skills development and
This brings me back to the main question to this effect as indicated and sated above.
The main question for this study would be as below:
1.7 Main question
What are the constraints facing the provision of skills to the Private Sector in Uganda? How has culture contributed to these constraints?
The above seem to be two questions, but it is a two –in-one question, and this will make me explore, inquire, analyzed, discuss the stature of the key areas in the study, namely:
The Private Sector Performance in Uganda, the Constraints facing this sector, the Provision of Skills in and for this sector plus Cultural Influences both in the said sector and in provision of the required skills respectively.
1.8 Defining culture
In my view, culture can have different definitions in different aspects, situations and fields of discussion. There is a distinction between National Culture, Organizational Culture and Societal Culture. All these types of culture however, have one thing in common, contribute or influence one another on the one hand. Societal culture has a big influence on Organizational Culture; Organizational Culture in turn affects National Culture. This is could be defined in simple terms as a mental mapping or mental
programming in the case of Geert Hofstede (1997).In all the above stages, the way people feel, think, act, react to emotions and situations, the way they approach some issues, the way they discuss issues, the way they judge and associate with others and finally the
social environment, that shaped and/or shapes them. All this is what entails culture to my own understanding.
In the case of this study, I am linking, societal culture to organizational culture (private sector) to national culture. Indicating how each state of culture in these stages influence or has influenced the other and how hitherto has fueled the constraints facing the private sector performance, of course holding other factors constant. For the society culture, this deals with personality traits, individual traits and values, how they have shaped
Ugandans’ mind in the process of learning, how the environment made them learn such traits, values and behaviors. They are not inherited but learned and reflect the social environment they have gone through.
The Organizational culture indicates the way in which the individual learned traits, values and behaviors in the societal culture do influence the groups in organizations and form some other super set ups of traits, values and behaviors. In turn these set up values, traits and behaviors of groups and teams in organizations influence the public perception in the long run hence influencing national culture. Culture is learned, it is not inherited. It derives from one’s social environment, not from one’s genes. This is a distinction of culture from human nature on one hand and from an individual’s personality on the other.
In the case of Uganda, I am looking at the influence on the three stages of culture, namely; the society level, the organizational level and finally the national level. Citing the educational system for example, the infantry school entry, the age, what they are taught at that age, the level of facilitation and teaching, the material used, the hygiene, the education offered to the infant kids, is all culture driven and culture related.
Joining the institutions of higher learning, having been taught and learned under such social environment, the perception goes with the candidate and guide him/her advance the same mental mapping to a higher level through the provision of skills, this in turn influences his/her skills, training and development to the future Job in case she/he is lucky enough to acquire one.
CHAPTER 2
2.1 Problem Statement
The public sector is shrinking, yet the private sector is failing to as fast as possible enough meet the ever expanding/ increasing labour market as pointed out by Tukahebwa (1998:71), which was supposed to create enough jobs as the main objective expected while implementing the privatization policy. By adopting the privatization policy, there was a huge expectation of private enterprises to expand and absorb the increasing labour force. The revised national programme of Poverty Eradication Action Plan (PEAP), see (GOU, 2003), Uganda’s national objective of creating employment and eradicate poverty seems achievable through the private sector, especially the micro and small enterprise segment.
However, this sector (private sector) is faced with constraints, namely, lack of capital, high taxes, limited space, lack of ready market, and lack of skills and competencies respectively. Below I will give a precise and concise explanation on each case of the constraints above and draw the cultural influence to it as I elaborate on how it has
(culture) contributed to such a constrainable approach towards skills training programmes and later economic development in the Private Sector in particular and in Uganda as a Nation or as a whole (Uganda’s economy).
2.1.1 Lack of Financial Capital
It would be wise to indicate that the above constraints are highly influenced by culture, of course holding other factors constant.
With a constraint like lack of capital, it could mean both human capital and financial capital where by the later influences the former or vice versa. With human capital, there is not enough funding from the private sector because there is not a well defined financial institutions system; this therefore renders the private sector to struggle with the little finances the sector can possibly access. To this fact therefore, it is not easy for the private organizations to give sufficient skills training programmes because they most of the time lack funds to support such programmes.
Unlike in the UK and/or the Netherlands where financial institutions help the private sector on such occasions due to a well designed and protected system, either by giving loans or under certain identified and greed up on arrangements and/ or terms which appear different in Uganda’s case. The micro-financial institutions that would help in this case, are more or less exploitative as for their interest rates are high which renders it to be difficult for the private organizations to realize a possible profit once they take up such loans. More alarming, they require security and sureties such as land titles, houses, buildings and other kind of fixed assets worth the loanable amount or the funds to be given as a loan. This makes it difficult for the organizations therefore, as most of them may not be having worthwhile fixed assets than rented or leased ones.
2.2 Lack of Human Capital
On the lack of human capital, due to lack of funds and enough or sufficient initial capital in the private sector, there may therefore not be sufficient funds to carry out sufficient research, skills training programmes hence resort to skills that may not be that much effective towards the organizational strategy and design. More to that, the educational curriculum is in away designed in a more theoretical than practical manner with colonial roots which apparently appear only theoretical due to either lack of technology on what is taught, lack of facilities and practice or even not applicable in the Ugandan climate than in the origins of our former colonial masters who designed it those days. I may appear critical or political but the fact is, Uganda’s education curriculum, may not be designed to suit or address Uganda’s needs and/ or requirements to develop but rather keep them and keep those who under go such training or education wondering what to do with their acquired skills. It is an education system more of Job/ employment seekers than job/
employment creators. This is where culture comes in, and this is where human capital becomes a constraint towards organizational performance. More indicators are that government expenditure on education is still minimal compared to other countries especially the designers of the said system.
The GDP percentage spent on education in Uganda is still small/little if naming it that way is only rational. There has been an international intervention like the World Bank’s funding of UPE (Universal Primary Education) under their Millennium Development Goal Project, which has obtained the results except that the only dilemma and the question I have come to frequently ask myself without an answer, is, “After UPE, what
education (Post UPE) and funds, say for USE (Universal Secondary Education), the post UPE pupils would be counted as illiteracy- surplus mass of people because they are most likely not to be absorbed in any system for they are not qualified for any system, they are just caught in the midst of illiteracy and semi-literacy, hence a massive surplus to be exploited by any sector.
According to Alison Wolf; (2002), it is indicated as an example, that for decades the British government has become more and more fixated on education by spending more and more money on pre-school education, Literacy strategies, on technical and
Vocational education initiatives; on new universities and new associate degrees in further education colleges; on city technology colleges, Youth Opportunity Programmes, on national training organizations, and modern apprenticeship. Wolf, further indicates that in 2001, education spending by public sector would top 50 billion pounds: 850 pounds for every man, woman and child in the United Kingdom which seems more than 1,800 pounds for every payer of income tax. Alison Wolf (2002) stratifies more on what the author terms as the ‘knowledge economy’ which argues that in this world, it seems, education is to be a precondition of economic success and indeed survival, to an even greater degree than in the century before.
The book further quotes David Blunkett, the then Secretary of State for Education and Employment in a speech given in February 2000:
The powerhouses of the new global economy are innovation and ideas, creativity, skills and knowledge. These are now the tools for success and prosperity as much as natural resources and physical labour power were
in the past century
The above statement is supported by another quotation carried by Alison Wolf (2002), the statement was made by Charles Leadbetter, a policy adviser to the British Prime Minister Mr. Tony Blair and major author of the Department of Trade and Industry’s 1998 policy White Paper on Building the Knowledge Driven Economy. Who indicate that:
The generation, application and exploitation of knowledge is driving modern economic
growth. Most of us make our money from thin air: we produce nothing that can be weighed, touched or easily measured. Our out put is not seen at
harbors, stored in warehouses or shipped in railway cars…That should allow our economies in principle at, to…be organized around people and knowledge capital they produce. Our children will not have to toil in dark factories, descend into pits or suffocate in mills, to hew raw materials and turn them into manufactured products.
They will make their livings through their creativity, ingenuity and imagination.
Alison Wolf (2002) insists that, the government expansion into ever larger areas of education and training has run parallel to their growing enthusiasm for detailed
intervention. The book further argues that education is a big player in the economy and the labour market of any country you care to think of, and almost unimaginably
enormous worldwide. Alison Wolf (2002), further again gives the ratio as at least no less
same book, Wolf (2002, p.2, table 1.1), it indicates numbers of students in the world as of 1997, which has a tremendous influence on their difference on their levels of
development, holding the population differences constant. It further shows the increase in the world student total since 1970 and students as percentage of world population as of 1997 plus a proportional increase in pupil/ student numbers worldwide between 1970- 1997. In the same book (p.8, table 1.2), it gives an overview of different governments’
expenditure as a percentage of their GDP. The book also indicates that the world’s whole economy has changed. That it is now so ‘knowledge-driven’ that only those nations committed to ’lifelong learning’ in a ‘learning society’ can hope to thrive.
This knowledge may be acquired in schools and some occupationally this means at work place. This may include the on –the-job training, organizational training programmes, company training programmes, which would cover for both specific or general on-the-job training which is mainly termed as Human Capital. Wolf describes specific training skills as the training which is relevant to only a particular company or employer while general training is useful in many firms besides the firms that do provide it.
In agreement with Edward P.Lazear (1993). In his theory of human capital, Lazear points out the On-the-Job training which covers the form of general-on-the-job training and firm-specific on-the-job training. The general-on-the job training is an investment in human capital that is effective in raising productivity at the firm providing the training and at some other firms by an identical amount while firm-specific on-the-job training is at the other extreme, it makes a worker more productive at the current firm but has no effect on productivity elsewhere.
In the case of Uganda, very few firms provide either skills and/or training. On-the-job training is far fetched to be obvious in the private sector; a few cases are seen or observed in the public sector with the help of the state but not rather the case in the key subject of this paper. This therefore brings me back to the Lord Dearing, 1997 and David Blunkett, Britain’s secretary of state for education and employment, 2000 quotations in the book of Alison wolf (2002) that:
For the state….higher education has become a crucial asset World class higher education ensures that countries can grow….
It is therefore at the heart of productive capacity of the new economy.
The above arguments are supported by the Confederation of British Industry, 1994 in a statement quoted in the same book of Wolf which says that:
The expansion of higher education…has been a major success story…
More resources must be found…to enable the system to continue to expand
Further more; Andrew Mayo (2001) has it well presented as he argues out the Human Capital factor and how it is influential in the success of any nation or organization. Mayo says that once an organization recognizes that its human capital is fundamental to its success, this provides the opportunity for HRM to be a true “business partner” and prioritize activities according to the level of value that will be contributed to the organization.
Andrew Mayo (2001) defines cultures as the systems, processes, and behavioral expectations built up over time that affects all parts of the organization. He gives the
processes which dwell much on organizational cultures. That, every organization and subgroup with in it has developed its own culture, which is not easily changed. It can be a significant barrier to any aspirations, blocking vital change or causing mergers to fail. It can also be a company’s powering strength. To this fact therefore, culture has a lot to do with education, skills training, human capital and hence performance per se.
Higher Education Vs Higher Economic Development and Cultural influence Model.
(Theoretical Model) Fig. 2
Fig.2: Education and Culture vs. Economic Development
Higher Econ.Dev’pt. Higher Education.
Reward & Recognition
-Leadership -Work groups - Physical environment - Econ.policies.
-opportunities to learn and develop.
-Rewards & recognit- nition.
National Growth
Vision & Values in Public & private Sectors.
Cultural- Influence
-Norms & Values -Policies -Systems &
processes -focus on learning
& innovations
-Quality of degrees -Labour force Quality(LFQ)
-Creativity & Innovation -Education facilitation -Level of research -No. of graduates per year.
2.3 Education and Culture vs Economic development:
Higher Education
Analyzing the points in the above figure that contribute to higher education in an economy, I will tackle one by one, trying to show how it serves as an ingredient for a successful higher and/or quality education system that may lead to economic
development, and show how each ingredient above is intertwined with cultural influence.
Quality of degrees awarded
In exchange for the loan of human capital, learning and development form a major of added value that people expect in return. This does not necessarily mean progressing onwards and upwards, as that is for relatively few. But people want to see investment in their capability, and opportunities to use their potential, (Andrew Mayo 2001, p.167).
The author adds that, there are some fundamental aspects of the organizational culture that foster learning, innovation, and change and to my experience the above said aspects have contributed less to a positive change in the Ugandan economy compared to the Dutch or the UK economies per se.
To be clearer to this effect, I would like to point out that much of the training offered in Uganda and at most institutions of higher learning, is more theoretical than practical, this is due to the fact that there are less facilities to make the learning more practical, due to this lack of effective and efficient facilities, the only task that can be accomplished by the state, is to provide the basics such as text books, pay for the lecturers and the teaching staff and provide food to the students. At the end of the study, there seem to be a mismatch between the training provided and the training needed, hence a practical
The above factor has been consolidated into a kind of culture, where economic reasons to this effect have been accepted into the minds of the society, lack of funding has been allowed to be a cultural norm and adopted to the highs of being either a natural
phenomenon or an unchangeable norm that the society has to adopt and deal with from time to time. Due to this culture, be it in the employment market, internships or research, most of it in the past has been depending on the “technical know who” in both private and public sectors. This has been brought about by lack of surety or assurance on putting ones acquired skills or training to use and in most cases it has been labeled or termed as
“corruption” with out gathering enough information or carrying a research on why it is so or finding the causes instead of pointing out the top layer problem.
In order to break this lack of facilitation, seemingly turned into a cultural norm and accepted with in the society, there has to be increased expenditure on education by the government, and increased funding to enable full facilitation to the education sector, revised education policies, education curriculum review, right from the lower levels to higher levels of learning, supporting technical institutions and equipping them with the required instruments. This would enhance learning since the returns on such trainings have been small in the past. The more the funding, the more the infrastructure, the more the facilitation, the more the support, the more the quality through both theory and practical knowledge and skills training, the more the realization of a delightful performance leading to economic development and growth.
Labour Force Quality (LFQ)
The most counting factor here is quality and competencies. Apparently, labour as a factor of production in the private sector in Uganda consists of resourcefulness of a few,
combined with the physical strength of the many. People are mainly a physical means of production than expertise. There is a growing need in this sector therefore to transform physical means of production to expertise management in order to be able to realize the returns on human capital investment or quality of the labour force.
Expertise management is also known as knowledge management, but strictly speaking it covers more than just knowledge. Expertise is a combination of knowledge,
understanding and experience that people apply in their work. Expertise is an alloy of proven quality, a mixture that has proven to be fruitful, though expertise differs from one individual to the other even if they have the same knowledge, (Hoekstra & Van Sluijs 2003, p.25)
To be clearer on this point, borrowing a leaf from my prior argument on higher education, having pointed out that there is a mismatch in the training provided and the training needed, it is quite difficult to measure the quality of labour in this regard. It therefore goes back to the above conclusion on what to do or what is required to have effective and efficient higher education systems.
The remaining indicators above are interlinked to the above effects. The creativity and innovation factor, education facilitation as discussed above, levels of research and the number of graduates per year are all ingredients of a higher quality employment market, higher performance and finally economic growth if at all these factors are taken care of.
2.4 Higher Economic Development Leadership
Those who study the rise and fall of firms have no doubt that high-quality leadership is an organization’s major asset. Poor leadership not only affects things like low morale, absenteeism, and attrition, but might also give rise to complacency, failure to respond to markets and customers, poor strategic choices, and many other undesired effects,
(Andrew Mayo 2001,p.160). In my view, talking of leadership here, I consider all sorts of levels, right from village level councils, parish, sub-county, county, district, parliament, till the top of the leadership ladder. Precisely in this case, considerations of the three arms of government i.e., the Legislature, Executive and Judiciary, where cultural influence has been in its lots, which in turn influence the private sector both in acts and policies.
As a result to the above influence, work groups have been dragged into the same bandwagon, the physical environment suffers from same adverse circumstance, and fair economic policies are yet to be realized in favour of the private sector development, of course considering all segments in this sector. Fewer opportunities to learn and develop in the realm of the private sector development plans have been scarcely observed. This could be due to the factors earlier discussed, which have seen the sector under go a more or less non-transitional period as time pelts along. With a few mild cases of growth, motivation, incentives, rewards and recognition are a dream yet to come true among the sector’s work force. This brings me to wonder therefore, as to whether Uganda in general, the private sector in particular requires higher economic growth to achieve higher education or higher education to achieve higher economic growth? To my conviction, the later comes first, should be first and must be first for any fundamental development strategies to be effective.
In addition to the above, Andrew Mayo (2001), points out that managing the stock of human capital, as reflected in a register of Human Asset Worth, is arguably the most critical activity of management. But the key processes for managing our human capital acquisition, retention, and growth. This is the main value creation and the only way to success if a nation, an organization or any entity or group of entities is vying success, it has to first prepare the mind before everything.
A value- creating nation, organization will plan for changes in its human capital budget alongside its budget for people-related expenses. To this therefore, I get the instinct to investigate whether the skills training programmes offered to Ugandans in either sector are really viable to realize the expected results as final profits to investing in such kind of programmes. To investigate further, how even the state funded higher education and skills training are relevant to realizing the core goals of success which are, increased adequate government expenditure on educational institutions, a focused curriculum, enterprise-based education, pre-employment training and apprenticeship training
respectively. More so, to have favorable policies advocating for fair practices for private sector performance, have fair and resolve labour policies to safe guard labour
exploitations, and finally, well designed and exploitation-free micro financial institutions for more reasonable interest rates on their loanable funds or monies to the MSEs.
Further still, questions arise as to whether there are competent Appraisal systems in place or even whether the ones seemingly in place can be redesigned to appraise the
because changing cultures and values alter the priorities of what we look for in performance. However, we can not deny the fact that cultural values and personal
attitudes shape many of the ways a person behaves. Values reflect a person’s ethos about their work and their interaction with the people connected with it because they rarely change. And on the other hand, attitudes are closely related to values, I would say in most cases they correlate or work hand in hand and are about how people view their world, in some cases they are termed as mindsets or mental maps. These mental maps are however shaped by education, by environment and its demands and by the culture to which people belong. These values and attitudes influence a lot in business ethics, people management, industrial relations, process improvement, hence performance and success.
The question that arises again and again however, is whether higher education leads to higher economic development or vice versa, which one leads to the other?
Borrowing a leaf of insight on the above question from, Nicholas Barr (2004), he argues that, the key point is that education outcomes comprise of knowledge, skills, attitudes and values. He further points out that higher education contributes both to national and
economic performance and promotes core values, thus has a significant cultural dimension that will vary across people with in a country and across countries.
In their Human Capital Models, Begg Fischer & Dornbusch (1994), Allsopp (1994). Also Solomon W.Polacheck & W.Stanley Siebert (1993), point out that human capital theory is explained in terms of job skills acquired in school and on the job. The basic point is that be it, earnings, costs or investments in higher education in Uganda, it should be incurred for future benefits.
2.5 High taxes and raw materials
The Private Sector faces constraints in terms of high costs for utilities which has affected the sector’s level of growth, of course in a negative way. In a 1998 World Bank and Private Sector Foundation Survey, it was found out that the Private Sector especially the MSE segment operators singled out the price and quality of utility services for instance water, electricity and telephone services to be constraints. In this survey, high taxes and interest rates and the cost of raw materials were also pointed out. The report further indicates that MSEs in Uganda have encountered some problems in obtaining raw materials whether they are imported or locally obtained like in the wood and wood product sector. It further indicates that metal fabricators also have to rely on raw materials either locally sourced or imported (ILO, 2001).
More so, there is not enough room left or created for the local industries whether infants or mature to protect them from heavy taxes and this has rendered them to stagger as their financial status fall-apart and yet there are not enough financial institutions to pull them out of the encored financial ditch as discussed prior. The culture of tax collection, tax policies, the culture of organizations, infant local industries, the culture of how raw materials are obtained and processed, who gets what and how, the culture research on taxes, and how to enforce and waive them, has rendered the private sector insufficient.
2.6 Lack of ready Markets and Limited space
The lack of market could be attributed to the lack of demand of the private sector, especially the MSE segment products and services. Lack of market information due to insufficient research and feasibility studies rendered by inadequate capital as discussed above could be some of the core causes to this effect.
According to the World Bank and Private Sector Foundation Survey (1998), there is also lack of demand as one of the constraints. I would attribute this to lack of relevant skills that leads to lack of innovation and quality management which stems from the indications pointed out above hence could also be attributed or termed as one of the culture leads in this case.
Due to the above fact, the Western World has adamantly been reluctant to open up or loosen trade barriers rendering Uganda and the rest of Africa to export semi-finished goods or you could even call them raw materials, which are later worked and improved on by the buyers and sent back as imported goods more over at high prices. In this case, therefore, if there would be a move to add value to the products of the private sector and export only finished goods, lobby the Western World to open up trade barriers instead of increasing aid, markets would be available, funds would be availed to the sector, the limited space would be improved on, and finally people would break away with the cultural ways of dependency, the Western World would also break away with the despise and brokerages and probably improve on their trade ties with African countries through their exploitative trade barriers, this has been sort of a culture. Unless this culture is dealt with, the market constraint remains because even the available local markets are not fully
exploited due t lack of funds and of course other factors held at ransom. With the East African Federation in the offing, Uganda hopes to exploit the available local markets and add value to the semi-finished goods and limit the exportation of raw materials hence breaking up with the culture, let us hope for the best as we await the implementation of such a strategy.
The Lack of skills and competencies may be connected to lack of human capital as explained prior.
This study therefore aims at investigating the extent to which the lack of skills and competencies, relevant training progarmmes, that has hindered employee absorption and performance while trying to look at the extent to which role culture plays in this sector and its advancement or lag. Based on this research, it is possible to form a “new hypothesis”.
2.9 Hypothesis
There is lack of commitment in training and there is also lack of relevant training. These have hindered development, particularly the employment creation capacity in the private sector. These have rendered poor gesture at full utilization and implementation, plus good results of the Privatization Programme, because it appeared as uncalled for, unsuiting, unfitting hence not worthwhile as thought it would be before its implementation. Though the results or the benefits of this privatization programme are realized, but they are least and the most affects and effects to this factor, is the degree of skills training and
development use. Lack of commitment and training can be addressed by government’s
CHAPTER 3
3.1 Specific questions
a (i) How is the structure of the private sector in Uganda like?
As indicated before, the private sector in Uganda has classes and segments. There are mainly two segments in this sector namely; informal (IS) and formal (FS) private sector.
In informal segment, you will find unregistered business units, voluntary companies, uninsured business sects and units, small scale businesses, transporters, producers, private infantry and primary schools, name it, while in the formal private sector, you will find similar businesses but delivered by registered companies and on a larger scale.
This also includes foreign investors, transporters, financiers, banks, firms, industries, and so on. This study will break even each of these sectors at a later stage, focusing mostly on the Micro and Small Enterprises since they seem to be absorbing a large volume of the labour force in the private sector, hence contribute a lot to economic development drive.
a (ii) What are the performance and skills requirements in the Private Sector?
Having a look out at where and in which segment skills are required most according to the above indications, pointing out to answer the above question gives me minor motivation due to the fact that there is a limitation as to whether the Private sector in Uganda provides education and/or training either informal or formal because there is not enough evidence to support or deny the fact. However, personal experience has it that, a minimal, very minimal amount of organizations in the private sector especially in the MSE do provide some on-the-job training.
I can not however in this study conclude that, organizations in the private sector in Uganda provide enough or relevant human capital whether general or firm-specific. A more thorough research with the help of primary sources of data could be required in this field to reveal the ultimate facts on the ground or the elemental constituencies in the private sector of the Ugandan economy and its performance in all realms with out segmentations.
Recognizing that skills and training are an important component for economic and employment growth strategy, it is of necessity that employees have a balance of generic and work specific competencies as well as interpersonal skills in order to be competitive in a globalized world (Abdelkarim and Ahmed:2003). As such, it would be essential therefore for this study to look at skills development and requirement as the investments put into workers or would-be workers in terms of providing them with proper and
