professional, associate professionals and technicians in the workforce is increasing over time, which suggests that demand in the labour market for these categories of occupation is unlikely to rise substantially in the foreseeable future. table2 : working population age 25 - 30 in professional, technical and associate professional occupations, 2014 working population age 25 - 29 2, 167, 000 ow in professional occupations 10, 800 ow in technical and associate 67, 200 professional occupations percent share of professional occupations 0. 5 in working population age 25 - 30 percent share of technical and associate 3. 1 professional occupations in working population age 25 - 30 source : national population and housing census 2014 main report, tables 2. 1, 4. 9 and 4. 11 this conclusion is based on two assumptions. first, that all, or virtually, all graduates enter the labour market, which appears a reasonable assumption to make. second, that no more than a negligible share of workers in the professional, associate professional and technical occupations are not graduates of higher education. if a non negligible share of technicians are non graduates of higher education, the employment prospects of higher education graduates are even bleaker. the stark implication of these numbers is that uganda educates too many people – by a factor of about 4 - in higher education than is needed by the economy, given its current state of development. why is demand for graduate level occupations low in uganda? the main reason pertains to the structure of the economy. outside of the public sector, workers with higher education are employed by medium and large scale private sector firms, which need managers, accountants, engineers, it specialists, etc. but these firms make up a small share of the economy and an even smaller share of employment. the 2010 census of business establishments found that formal sector enterprises ( enterprises employing 5 or more workers ) employed only 3. 3 percent of the entire workforce ( this includes all categories of employment of which professionals are only a small share ). the ugandan economy still predominantly comprises household and microenterprises, mainly engaged in agriculture, artisanal manufacturing and informal services ; these enterprises do not require professional workers. until there is radical change in the structure of the ugandan economy, with employment in formal sector private enterprises replacing employment in household and microenterprises, the demand for graduate level employment as a share of total employment is unlikely to rise. structural change of this nature will eventually occur in uganda, but it will be a slow process, probably taking several decades, not

the financing of education depends on the contribution which educated people will make to the economy once they enter the labour force. education should enable the people who receive it to increase their productivity, relative to what would be the case if they had not been educated. higher productivity will result in higher economic output which will generate the resources to enable the cost of the education to be recouped. this is applicable whether the education is paid for entirely by the student or paid for in full, or in part, by the taxpayer. however, if the costs of higher education exceed its discounted benefits, no system of financing will be sustainable without subsidy from some other sectors of the economy. 2. how well does the ugandan higher education system meet the country ’ s developmental needs? unfortunately, there are grounds to believe that higher education in uganda is ill suited to supporting the developmental needs of the country. uganda educates far more people at tertiary level than can be productively absorbed by the economy, given its current level of development. this is both a waste of resources which impedes economic development and is financially unsustainable. furthermore, the excessive numbers of students in higher education, and the very low entry standards, have degraded its quality. the result is that the quantity of university graduates is too large for the needs of the economy but the quality of these graduates is too low. it is also possible to argue that the education system fails to provide a sufficient supply of entrants to the job market with vocational skills, or with vocational skills of only poor quality, although that is not the fault of the education system alone, as these types of skills are often best learnt through on the job training, such as apprenticeships, yet there is dearth of employers who can provide this type of training in uganda. in 2014 there were 180, 000 students enrolled in ugandan universities and a further 69, 000 students enrolled in other institutions of higher education ( colleges of business and commerce, teacher training colleges, etc ) ; hence there was a total of 249, 000 students enrolled in higher education ( see table 1 ). if we assume that students pursue a three year course, this implies that, for each single year cohort of university age students, there are 60, 000 students enrolled in universities and about 83, 000 students in all types of higher educational institutions. the 2014 population and housing census revealed that there was 3. 18 million people in the 20 - 24 age cohort ( the relevant age cohort for