Why Museveni's bid to lower retirement age to 55 years could backfire

Lowering the retirement age from 60 to 55, as Uganda struggles to cope with youth unemployment, is back on the cards. But experts are warning of technical and financial pitfalls.

With less than six months to the general election, President Yoweri Museveni has come under pressure to get rid of the old-guard in the public service.

The pressure is mainly from the youth, who constitute the largest voting block.
While speaking during celebrations to mark the Youth Day recently, President Museveni promised to lower the retirement age from 60 to 55.

The proposal is less radical than an earlier one to lower the retirement age to 50 years, but it will free up an estimated 33,000 jobs. However, with a backlog of more than one million unemployed youth, many of them unskilled, and another 400,000 joining the job market every year, the initiative does little to take away Museveni’s problem.

Anticipated skills gaps coupled with inability of the targeted labour pool to absorb the accruing job vacancies, future pension contribution gaps and potential social costs incurred by retirees have been cited as key threats to the policy review.

The review is being championed by President Museveni, who recently said a cut in the official retirement age would create more jobs in the public sector and mitigate rising youth unemployment.
However, the policy move also reflects a U-turn by the government, having raised the retirement age to 60 in the early 2000s from 55, the benchmark that had been in place for decades.

Though general unemployment remains high in the country, limited access to jobs among the youth has prompted concerns within the political elite on their role in political protests, rebellion and drug abuse.

The latest unemployment statistics were unavailable by press time, but the prevailing urban unemployment is estimated at over 20 per cent of all active adults, many of whom are between 18 and 35 years of age.

Over 60 per cent of the population is below 35 years and about 400,000 youth enter the job market every year, according to data from the population secretariat.

Thus many youths find themselves unemployed, leading to frustration and, consequently, to drug abuse and political dissatisfaction.

A case in point is the September 2009 political riots witnessed in Kampala and other towns in Central Uganda, sparked off by the government’s refusal to allow the Kabaka of Buganda to visit Kayunga district.

The riots claimed 23 lives and were mainly instigated by unemployed urban youth disgruntled by the government’s action.

The government expects to generate over 30,000 jobs through the policy move. But observers say lack of relevant skills needed in the civil service among the youth and the lingering pension deficit might undermine the policy intervention.

“Professional areas like agricultural research and university education will be most affected by the reduction in retirement age due to the high numbers of highly experienced professionals above 55 years.

“Such employees have matured in their line of work and are ready to pass on vital knowledge and skills, which becomes impossible when they are retired suddenly.