A critical analysis of the impact of labour export on the economic growth of developing countries: a case study of Uganda

Abstract

This dissertation critically examines the contribution of labour export to economic growth in least developed countries, using Uganda as a case study. It adopts a doctrinal legal approach complemented by a desktop empirical review of primary and secondary sources, including national statistics, policy documents, legislation, and international labour migration literature. This study maps out Uganda’s labour outflow or migration starting from the early 1970s, late 1980s, 1990s to the present and critically analyses the legal, regulatory, and institutional framework of the country in the governance of labour migration. The findings of the study show that the contribution of the labour export sector to economic growth of Uganda’s economy goes without saying, stemming primarily through rising remittance inflows that is used to support household consumption, financial inclusion, and small-scale investment. Suffice to note however, these gains remain uneven and insignificant or negligible due to gaps that exist within the country’s governance of its labour export sector. Uganda’s legal, regulatory, and institutional framework demonstrates strengths in relation to a structured licensing regime for recruitment agencies, standardized contracts, pre-departure training, bilateral labour agreements, and increasing inter-agency coordination. The foregoing strengths notwithstanding, there are persistent weaknesses presenting in form of institutional corruption, limited worker protection in destination countries, inconsistent data systems, and weak reintegration mechanisms which have gravely compromised and/or undermined the sector’s optimal developmental potential. The study concludes that LDCs can better exploit the full potential of their labour export sector and earn its best advantage to significantly support economic growth by adopting strong and quality legal, regulatory and institutional frameworks, ensuring cross-border protection, and boosting domestic reintegration capacity. The study immensely contributes to scholarship and policy formulation by recommending reforms targeting strengthening legal, regulatory and institutional frameworks, buttressing enforcement mechanisms, improving bilateral labour standards, enhancing migrant protection, formalizing remittance systems while lowering cost of transacting in remittances, and developing structured reintegration and skills-recognition pathways. It further proposes ratification, domestication and effective implementation of relevant international standard labour migration covenants to align Uganda’s labour export legislative regime with global standards and promote sustainable, inclusive growth.