employment opportunities as the 8 industries listed above and is not expected to in the future. Similarly, looking at the electricity industry, although there were –per UBR 2010 ‐some 50 enterprises of various size categories related to the generation and transmission and distribution power, their combined work force was fewer than 800 people. This was indeed half of the figure per UBR 2001. The perception of the industry as one in which Uganda has comparative advantage therefore does not seem to be warranted by recent job growth trends of the industry.

This seems to be the case also with two of the presumed comparative advantage industries within manufacturing, namely, the tobacco products industry and textiles. Thus, per UBR 2010, the textiles industry employed fewer than 1,500 workers and seemed to have shed as many jobs since UBR 2001. And with a workforce only of about 600 spread out among three companies, the tobacco industry was no major employer either per UBR 2010 and seemed to have lost as many jobs since UBR 2001.

Most of our analysis relating to the presumed comparative advantage industries as listed above will therefore focus on the 8 industries shown to have been significant employers in UBR 2010.

# **_2.3. Basic patterns in labor reallocation_**

An analysis of UBR 2001 and UBR 2010 shows that the monetized, non‐subsistence part of Uganda’s economy underwent significant structural change over that decade involving a seven percentage point decline in the employment share of the traded sector (that is, manufacturing and commercial farming, fishing, forestry and mining combined), in favor of non‐traded services. The decade clearly was one of rapid growth in employment economywide, whereby aggregate employment grew at the rate of 12 percent a year from 576,138 in 2001 to 1,191,805. As can be seen in table 2, the growth was spread across all the three broad sectors of commercial agriculture, manufacturing and services and relatively high everywhere. But there was wide disparity between sectorial annual rates these being 3%, 6% and 14% for commercial agriculture, manufacturing and services, respectively. This led to a decline in the employment share of both traded sectors (commercial agriculture and manufacturing) from about 24 percent in 2000 to 17 percent in 2001, which amounted to the reallocation of 7 percent of aggregate employment to the non‐traded service sector, not necessarily in the sense that former agricultural workers or factory hands moving to non‐traded services, but at least in part in as far as a higher percentage of new employment occurred in non‐traded services than did in commercial agriculture and manufacturing combined as a result of which the relative share of non‐traded services in aggregate employment rose all the same.

By contrast employment growth in the service sector averaged 16 percent a year for the decade pushing the sector’s share in aggregate from 74% to 81%. This also largely represented a rise in the employment share of non‐traded services. The growth rate of employment in traded services averaged only 1.2% a year throughout the decade – a rate that is so low that it actually led to a decline in the share of the traded services in aggregate employment from about one percent to half a percent.

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