Uganda’s construction sector is being held back by weak regulation, limited political commitment, a shortage of skilled labour and bureaucratic procurement processes, constraining its ability to create jobs and drive economic growth.
Although the sector contributes between 12 and 17 per cent of the country’s Gross Domestic Product (GDP) and is growing at an annual rate of about 12 per cent, it accounts for only 2 to 2.5 per cent of total employment.
The low level of job creation, particularly quality employment, reflects broader structural weaknesses within the industry, including poor construction standards, delayed project completion and low productivity.
These findings are contained in the World Bank Group’s 27th Uganda Economic Update, which says the sector’s challenges can be addressed, positioning construction as one of Uganda’s leading sources of employment.
Published under the theme Building on Urban Transformation: Construction as a Jobs Engine, the report examines the sector’s untapped potential, the structural constraints limiting its growth and the reforms needed to unlock its role as a driver of employment and economic transformation.
Speaking at the report’s launch, World Bank Division Director for Uganda, Kenya, Rwanda and Somalia, Qimiao Fan, said Uganda’s rapid population growth and urbanization are increasing pressure on the labour market, while planning has failed to keep pace with the rising demand for jobs.
Fan said the construction sector has the potential to create about 6,000 direct jobs each year, with the figure rising to approximately 22,000 when linked to related sectors such as climate resilience.
However, he noted that the industry remains dominated by micro and small enterprises, while weak demand and poor sector governance continue to limit its full potential.
By Newsroom
3rd July 2026
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