The Telecommunication Sector of Uganda

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This chapter presents the geographical aspects of the study area, population characteristics, economic aspects of the country, a summary of economic history from independence to 1970 (the Amin’s era 1971-1979), the period 1980 – 1985, the period 1986 – 2014, major reforms undertaken in the business sector of Uganda, the oil sector of Uganda, skill gaps, specialized skills, a summary of the health sector of the country, Uganda’s dream – Vision 2040 and a conclusion. The chapter was structured this way in order to provide the reader with a description of the historical and socio-economic aspects of the study area. This was done on the premise that such information was necessary because of its direct and indirect relationship or influence on the economy where the medium sized enterprises did operate. Secondly, the researcher held the view that historical and socio-economic aspects in a way, influenced or had a bearing on management, business direction and operations of the medium sized enterprises in the country. Lastly, from the onset, it is also important to appreciate that this study, a talent management model for medium sized enterprises was conducted in Uganda.

 Geographical Aspects of Uganda

Uganda is relatively a small country located in East Africa, on the African continent. The country borders Kenya to the east, the Republic of South Sudan to the north and the Democratic Republic of Congo to the west. Basically, Uganda is in the heart of the Great Lakes region, surrounded by three fresh water lakes, namely: Lake Edward, Lake Albert and Lake Victoria. The country is landlocked with no access to the sea but much of its border is lakeshore (Factbook, 2010). Consistently, it can be argued that this lack of direct access to the sea contributes to the high haulage fees which in turn increases the costs of internal business processes. This phenomenon is likely to deny the medium sized enterprises the opportunity to invest financial resources in management aspects like talent management systems because of the high competing demands against limited resources therein.
Uganda covers a total surface area of approximately 241,038 square kilometres, water bodies inclusive and is on the equator. It is more temperate than the surrounding countries in the eastern region of Africa. This temperature is mainly attributed to its altitude. Uganda is typically a plateau with a perimeter of mountains. The geographical setting has made it more appropriate for agriculture and is less prone to tropical infections than other nations in the region. Furthermore, the climate is tropical and generally rainy with two dry seasons namely, December to February and June to August. In the northern part of the country, towards South Sudan, the area is categorized as a semiarid East Sudanian savanna (Ndawula, 2013). Therefore, it could be argued that it is the agriculture sector which is the critical driving force behind the medium sized enterprises in Uganda. It is the agricultural sector which produces the input for the medium enterprises or it acts as a major consumer for the outputs produced by these enterprises. Furthermore, it could also be advanced that the location of medium sized enterprises in the rural areas is more influenced by the agriculture sector activities. These enterprises are operationalised in order to enhance forward and backward linkages with the agricultural sector in Uganda and this in turn has a bearing on the talent requirements.

Population Characteristics of Uganda

The results of the National Population and Housing Census 2014 revealed that the population of Uganda stood at 34.9 million people. Statistical analysis also revealed that the population had grown from 24.2 million; basing of the figures of the 2002 Census. Furthermore, by applying the average annual growth rate of 3.03 per cent, it is projected that by the year 2025, the population would stand at 47.4 million. Uganda has the world’s youngest population with over 78 per cent below the age of 30 years. Largely, these young people are dependents on the already constrained working class in the urban areas and extended families in the rural settings. This scenario has long term negative effects on saving and investment in the country. Secondly, the phenomenon has a direct negative effect on the medium sized enterprises. The population is unable to rapidly save and invest in medium sized enterprises as resources are spent to maintain the unemployed youth below the age of 30 years. From another preceptive, the high unemployment phenomenon has far reaching economic and political challenges to the economy. A case in point, the overall market base does not expand as anticipated and this has a negative multiplier effects on medium sized enterprise growth and employment creation. These medium sized enterprises are not in position to maximize economies of scale because of the inability of the population to translate itself into potential markets because of the high percentage of the unemployed people in the economy (Uganda Bureau of Statistics (UBOS, 2014; Ssewanyana, Matovu & Twimukye, 2011).
Economic estimates also indicate that a large proportion (i.e., 80 per cent of the total population of Uganda), is employed in the agriculture sector. The sector contributed 14.7 per cent of the Gross Domestic Product (GDP) of the country (Ministry of Finance, Planning & Economic Development in 2011 (MoFPED, 2011). By and large, the agriculture sector is characterized by low productivity, underdeveloped supply chains and low public and private investment. This under performance of the agricultural sector in a way explains the low engagement of medium sized enterprises in food processing and related activities in the rural areas. At the same time, 80 percent of the increasing population being rural based with high unemployment of the youth is a marker that medium sized enterprises in the rural areas do experience compounded challenges related to the supply of talents required to man and sustain business operations of the medium sized enterprises located therein. At the same time, the general lack of sustained agricultural growth and the slow process of diversification of the agricultural sector has remained a great threat to enterprise development in the rural areas and poverty reduction in Uganda. This is because the rate of employment creation is low which in turn affects the overall demand of goods and services and this influences the propensity of medium sized enterprises operations in the rural areas (MoFPED, 2011; Ssewanyana, Matovu & Twimukye, 2011).
The Uganda’s labour force was mainly composed of people aged between 14 – 64 years, generally in paid employment, self-employment, unpaid family work and the unemployed. The labour force was estimated at 9.8 million people, aged between 14 – 64 years. It was further projected that eighty-five per cent (85%) of the said labour force resided in the rural areas and thirty per cent (30%) of it was classified as illiterate. Statistically, it was further projected that about seventy-seven per cent (77%) of the projected labour force had not attained primary level education and about seventy-five per cent (75%) of the labour force was below the age of 40 years. This statistical situation implied that the vast majority of the people who constituted the labour force cluster lacked skills given the fact that the primary education system in Uganda was not vocational based (MoLG&SD, 2006). The researcher held the opinion that this literacy scenario had a negative impact on skill enhancement and the overall talent development agenda in Uganda. Consequently, for the enterprises to sustain competitiveness, the need to develop talents could not be under estimated. This assertion is supported by the fact that most people tend to seek for manual related employment opportunities where the required level of skill requirement is very minimal, if any, and talent development related aspects seem not to hold.

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Economic aspects of Uganda

The GDP per capita of Uganda was estimated at 370 US Dollars and the Human Poverty Index placed at 34.7. Uganda is classified as one of the world’s poorest country. The country is still struggling with HIV/AIDS pandemic with a prevalence of 6.4 per cent, and with a high external debt burden of 3.2 billion US Dollars (VAR-Uganda, 2009 cited in Ndawula, 2013). Uganda is rated as a very high consumer of imported goods and yet, the exports were very low indeed. A case in point, in the financial year 2011/2012 indicated that the country imported goods and merchandise worth US $ 5.3 billion against exports worth US $2.5 billion (MoFPED, 2011). These figures indicate that the economy continuously experiences an unfavourable balance of payment position. This has created a situation beyond any economy’s means; hence the need for reforms cannot be exaggerated. It has been argued that this unsustainable economic performance is mainly attributed to low productivity in the manufacturing sector. For instance, the manufacturing sector contributed only 8 per cent of the country’s GDP, compared to 16 per cent in Kenya and 15 to 20 per cent in South Africa. This low productivity in the manufacturing sector is attributed to a number of causes. Chief among them is the failure to mobilise the required capitalization, dumping of inferior quality products on the market, high illiteracy rate and insufficient talent supply (MoFPED, 2011; Ndawula, 2013). Based on this analysis, it is logical to advance that the models used to manage human resources in the manufacturing sector are wanting. Thus, the need to examine the whole spectrum of talent management is a brilliant idea. Consistently, this study is intent to evolve mechanism of talent management in respect to medium sized enterprises and this will go a long way to transform the manufacturing sector. As a benefit, the economy is likely to experience improving performance which in turn will positively impact on the balance of trade.
According to World Bank-Uganda (2010), during the last ten years, the economy of Uganda grew at an average rate of 7.7 per cent and poverty levels declined by 15 per cent in the same period. This progress has mainly been credited to improved macroeconomic management and economic reforms that have led to better economic performance. However, poverty is still severe in rural areas where 41.7 per cent of the rural population lives in absolute poverty compared to 12.2 per cent of the urban population. Hence, growth in rural incomes is the cornerstone for poverty reduction in Uganda. The gross domestic savings are extremely low, estimated to be 0.8 per cent in 1990, 8.0 per cent in 2000, 12.7 per cent in 2007 and 13.5 per cent in 2010.The Gross National Savings were estimated to be 5.6 per cent in 1990, 14.4 per cent in 2000, 18.2 in 2009 and 18.8 per cent in the year 2010. This economic status clearly shows that scarcity of capital is one of the major origins of Uganda’s economic challenges. The soaring levels of unemployment, poverty, unfavourable balance of payment and low savings can be solved by developing a more reliable and sustainable framework for attracting more Foreign Direct Investment (World Bank, 2013). At the same time, it is important to appreciate that FDI comes with certain demands. Chief among them is for the economy to have the required skills to take up employment in the established facilities. Therefore, it could be argued that this study of talent management in the medium sized enterprises in Uganda will assist the would-be investors to apply practical models to manage and develop talents in this challenging environment.

 Summary of Economic History of Uganda – The post-independence period up to 1970

Prior to the attainment of independence in 1962, the financing of development projects in Uganda was mainly done by the colonial power, the British Government. Uganda attained her independence on October 9, 1962 from the British. It is held that at the time of independence, the country had one of the most promising economies in Sub Saharan Africa. Immediately after independence, Uganda exhibited the said economic latent. For example,
the domestic savings were estimated to be 15 per cent of GDP (Collier, 2009). Obwona (1998) illustrated that after the attainment of independence from the colonial master, the GoU had to find alternative sources of financial resources for financing the on-going, planned and future development projects. Some of these sources included foreign direct investment (FDI), revenue from taxes and bilateral loans. The GoU’s commitment towards promoting investment was clearly demonstrated by the Uganda Industrial Act of 1963. This legislation emphasised the promotion of both foreign and local investment in order to accelerate the socio-economic development of the country. Overall, the strategy intended to promote industrialisation at the expense of agriculture. This economic direction was deemed appropriate mainly because the government of Uganda, then, considered industrialisation as having both backward and forward linkages, market for other sectors and high propensity employment opportunities. The belief was that the strategy for industrialisation could accelerate socio-economic development and poverty reduction in the country, resulting into greater multiplier effects in the economy. All the strategy and actions in promoting industrialization were channelled and managed by the Uganda Development Corporation (UDC), a public body corporate established by the British government in 1952 to spearhead and accelerate economic development of the country.
At the same time, few investors of Asiatic origin, for example, Madhvani and Metha boosted the industrial sector of the economy. They invested in the agriculture and manufacturing sectors, creating employment opportunities. This was because the internal business processes were labour intensive. In 1964, with the strategy to boost investment initiatives by the private sector, the GoU enacted the Protection Act. This legislation was edged, among other things, to protect investors against compulsory acquisition by the government of business interests in enterprises; it also provided rights to repatriate capital, interest and dividends. All this was done in anticipation to enhance business confidence to the private sector participation in
ventures with the view to accelerate production, employment and socio-economic development. However, in 1960’s the economy of Uganda witnessed the government’s change in policy in as far as private sector participation was concerned. The government began undertaking the nationalization strategy of foreign investments and this had far reaching consequences on enterprise development in the country. UDC which was designed to start investments with big capital outlays and thereafter auction them to private investors was accorded the legal right to control 51 per cent in various large and medium sized enterprises undertaking, owned by the private sector players. These projects included Tororo industrial Chemicals and Uganda Cement Industries, among others (Sejjaaka, 2004; Obwona, 1998).


1.1. Introduction
1.2. Background to the Study
1.3. Statement of the Problem
1.4. Aim of the Study
1.5. Research Objectives of the Study
1.6. Main Research Question
1.7. Justification of the Study
1.8. Significance of the Study
1.9. Delimitation and Scope of the Study
1.10. Limitation to the Study
1.11. Assumptions of the Study
1.12. Outline of the Thesis
1.13. Summary of Chapter One
2.1. Introduction
2.2. Geographical Aspects of Uganda
2.3. Population Characteristics of Uganda
2.4. Economic aspects of Uganda
2.5. Summary of Economic History of Uganda – The post-independence period up to 1970
2.6. Major Reforms Undertaken in the Business Sector of Uganda under the umbrella of “Doing Business in Uganda” – 1986 to 2013
2.7. The Oil Sector of Uganda
2.8. The Telecommunication Sector of Uganda
2.9. Skill Gap
2.10. Specialised Skills
2.11. Health Sector of Uganda
2.12. Uganda’s Dream – Vision 2040
2.13. East African Community
2.14. Summary of Chapter Two
3.1. Introduction
3.2. The Concept of Small and Medium Sized Enterprises (SMEs)
3.3. Conceptualisation of Talent Management, the Concept of Talent, Value of Talent Management, Concept and Approaches to Talent Management in E
3.4. Approaches to Talent Management
3.5. Common Types of Talent Pool Focus
3.6. Theoretical Framework of the Study
3.7. Conceptual Framework of the Study: Factors Influencing Talent Management in Medium Sized Enterprises in Uganda
3.8. Summary of the Chapter Three
4.1. Introduction
4.2. Main Research Question
4.3. Research Design (Strategy)
4.4. Research Taxonomy for the Study
4.6. Intentions of the Study and Research Design
4.7. Research Strategy for the Study
4.8. Time Horizon for the Study
4.9. Research Methodology for the Study
4.10. Quantitative Data Approach for the Study
4.11. Study Site
4.12. Targeted Population (Participants) of the Study
4.13. Sampling Techniques for the Study
4.14. Sample Size for the Study
4.15. Targeted Sample for the Study
4.16. Sampling Frame for Quantitative Data
4.17. Unit of Analysis for the Study
4.18. Survey Instrument (Questionnaire) for the Study
4.19. Pilot Testing of the Questionnaire
4.20. Level of Reliability of the Questionnaire
4.21. Design Effects
4.22. Reliability and Validity Features
4.23. Data analysis and Processing of Quantitative Findings (Procedure)
4.24. Qualitative Data Approach for the Study
4.25. Ethical Considerations
4.26. Summary of the Chapter
5.1. Introduction
5.2. Quantitative Data Presentation Based on the Research Questionnaire
5.3. Questionnaire Distribution for the Study
5.4. Response Rate
5.5. Demographic Profile
5.6. Univariate Analysis of the Responses
5.7. Univariate Analysis of Enterprise and Managerial Characteristics
5.8. Univariate Analysis of Managerial Characteristics
5.9. Reliability of the Research Instrument
5.10. Summary of Latent Constructs
5.13. Correlation Analysis of the Study Constructs
5.15. Research Question (RQ) 1:
5.16. Research Question (RQ) 2:
5.17. Research Question (RQ) 3:
5.19. Research Question (RQ) 5:
5.20. Research Question (RQ) 6:
5.21. Research Question (RQ) 7:
5.22. Final Modelling Process – A Talent Management Model for Medium Sized Enterprises in Uganda
5.23. Qualitative Data Discussions and Findings
5.24. Summary of Chapter Five
6.1. Introduction
6.2. Discussions of findings of the study
6.3. Conclusions
6.4. Recommendations
6.5. Suggestion for further Research
6.6. Summary of Chapter Six

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