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How Employment in Uganda is Affected by Direct Investments from the Abroad

In spite of the discouragement caused by the tyrannical regime of Idi Amin from 1971 to 1979, foreign investors still find Uganda a favorable place for investment. This has been enhanced by the government’s efforts to attract investors through many favorable investment policies.Foreign Direct Investment usually has significant effects on employment in any economy. It is important for these effects to be understood to enable governments to determine whether the investments are worth the incentives forwent to encourage them. This paper presents a case study of the effects of Foreign Direct Investment on employment in Uganda. It presents answers to the questions of. what the level of FDI is in Uganda, how many people are employed in the foreign companies, the kind of foreign investments in the country as well as which sectors receive most investment.However, there is a conflict in the findings of the effects of FDI in the Ugandan labor market as there is still a need for 15 million jobs to be created, implying that FDI is not the sole solution for economic development through employment generation. A range of factors needs to be taken into consideration to understand the effects of FDI on the Ugandan economy. The quality of labor, the standard of living, skills, human resource retaining capacity of the local market, wages, etc. determine the success of employment generation. Also, valid primary data can be gathered to determine the effect of FDI on the Ugandan employment market in the different sectors like manufacturing, agriculture, etc. as there seem to be conflicts in perspectives of its effects on local employment.The findings of this research provide an in-depth understanding of FDI as well as its positive and negative impacts on Uganda’s labor force. The recommendations put forward can be useful in dealing with the bottlenecks to increased per-capita income and economic growth in general. The situation in Uganda reflects that of many other developing economies and therefore this case study can be used as a basis for reforms regarding FDI to facilitate growth.