Kampala, Uganda—April 2, 2025 – A recent study by the Economic Policy Research Centre (EPRC), titled “Creating Decent and Productive Jobs Through Digital Transformation in Uganda,” has highlighted one of the most pressing challenges in Uganda’s economic transformation: the widening digital divide between sectors. While Uganda is making strides in digitally advancing sectors such as information and communication technology (ICT), real estate, and financial services, large swathes of the economy—particularly agriculture, mining, transport, and informal retail—remain digitally marginalized. This disparity has profound implications for employment quality, wage growth, and equitable economic development.
According to the EPRC study, the level of digitalization across Uganda’s sectors is sharply uneven. At the top of the digital spectrum are ICT (60.8 percent), real estate (61.1 percent), and finance and insurance services (51.3 percent), sectors concentrated in urban centers and reliant on a digitally skilled workforce. These sectors not only attract better wages but also tend to offer more secure and formal employment contracts. By contrast, low-digitized sectors such as agriculture (28.6 percent), mining and quarrying (24.4 percent), transportation (24.6 percent), and wholesale and retail trade (42.7 percent) employ the vast majority of Uganda’s labour force but lag far behind in digital integration.
Agriculture remains the backbone of Uganda’s economy in terms of employment, accounting for approximately 35.7 percent of the workforce. Despite this dominance, its digital score of 28.6 percent reflects a sector deeply entrenched in analog processes and informal practices. The digital gap in agriculture is a result of multiple intersecting challenges: low internet penetration in rural areas, poor access to smartphones and ICT tools, limited investment in agricultural tech, and widespread digital illiteracy among smallholder farmers. The consequence is a sector that continues to operate below its potential, with farmers missing out on tools such as mobile weather alerts, digital market platforms, e-extension services, and access to digital credit. Without these innovations, rural communities remain locked in low productivity cycles, with few prospects for wage improvement or formalization of their labor.
Similarly, the mining and quarrying sector—largely informal and labor-intensive—registers a digital score of just 24.4 percent, the lowest among all sectors assessed. This sector suffers from limited digital infrastructure, almost no integration of automated or data-driven systems, and minimal access to digital safety and environmental monitoring tools. The lack of digitization in mining not only limits productivity but also exposes workers to health and safety risks that more advanced technology could mitigate. As a sector often based in remote regions, the barriers to digital adoption are heightened by poor road access, unreliable electricity, and negligible ICT investments.
The transportation and storage sector, with a digital score of 24.6 percent, illustrates a paradox. While digital ride-hailing platforms such as SafeBoda and Uber have introduced digital tools to urban transport systems, most of the sector remains informal and non-digitized. Boda boda riders, cargo handlers, and long-distance truckers rarely benefit from digital training or access to navigation, logistics tracking, or safety technologies. The proliferation of mobile phones has created some entry points for innovation, but affordability, data costs, and inconsistent network coverage continue to undermine uptake. This is a missed opportunity in a sector that could benefit significantly from real-time traffic data, digital freight matching, and online safety compliance systems.
Wholesale and retail trade, with a slightly higher digital score of 42.7 percent, demonstrates some moderate progress—particularly through the rise of e-commerce platforms like Jumia and Jiji, mobile payments, and digital marketing. However, this progress is largely confined to a small segment of urban, formally registered enterprises. Most Uganda’s retail workers are informal, operate in low-tech environments, and have little to no access to digital tools or platforms. Without structural support, the informal retail economy remains vulnerable to stagnation and exclusion from the digital transformation narrative.
The digital lag in these sectors has far-reaching implications. First, it deepens income inequalities. The EPRC’s regression analysis shows that a one percent increase in a job’s digital score leads to a five percent rise in monthly earnings and a six percent greater likelihood of social security coverage. Workers in low-digitized sectors, therefore, are more likely to be trapped in poverty, lacking not only decent wages but also the legal protections and benefits associated with formal employment. The same analysis found that jobs with higher digital scores had a nine percent greater likelihood of being covered by employment contracts and were 11 percent more likely to be classified as “decent employment.”
Second, the current digital trajectory reinforces urban-rural inequalities. Highly digitized sectors are concentrated in Kampala and a few other urban centers where internet access, digital literacy, and technology infrastructure are more developed. Rural areas, where most of the low-digitized sectors operate, face a combination of digital illiteracy (only 20 percent of Ugandans are digitally literate), lack of reliable electricity, and limited access to affordable internet or devices. Only two percent of households in Uganda own a computer or laptop, and in rural areas, ownership drops to just 0.9 percent. These gaps are further exacerbated for women and youth, who face cultural, financial, and educational barriers to digital access.
The informal nature of work in low-digitized sectors also limits social mobility. The EPRC estimates that between 2016 and 2021, digital transformation contributed to the net creation of 942,000 jobs in Uganda. Yet, 91 percent of these jobs were in informal, medium-digitalized occupations such as street food vendors, shopkeepers, fishery workers, carpenters, and nursing assistants. While this has expanded employment numbers, these roles often lack formal contracts, social protection, and decent pay. For example, the average monthly income for street vendors is UGX 31,000—well below the national median wage of UGX 200,000. Without deeper digital integration, these jobs will remain precarious.
To address these challenges, the EPRC study urges a multi-pronged policy approach. First, investment in digital infrastructure must be scaled up, especially in rural areas. Extending broadband access, ensuring reliable electricity, and subsidizing device ownership are foundational steps. Second, targeted digital skilling programs are critical—particularly for women, youth, and informal workers. Programs that combine digital literacy with business skills and financial access could transform the productivity of agriculture, retail, and transportation.
Third, policies must reflect the changing nature of work. Labour laws should be updated to recognize gig workers, platform-based labour, and informal digital enterprises. This includes expanding social protection frameworks to cover non-traditional workers. Finally, public-private partnerships can play a pivotal role. By supporting digital hubs, incubators, and local innovation ecosystems, the government can help unlock digital potential in underserved sectors.
The contrast between Uganda’s high and low-digitized sectors paints a clear picture: digitalization can improve wages, job quality, and economic inclusion—but only if its benefits are equitably distributed. As Uganda positions itself for the Fourth Industrial Revolution, the real challenge lies not in creating a digital elite but in building a digital economy that works for everyone. For now, the country’s most vulnerable workers remain digitally invisible—and that is a gap Uganda cannot afford to ignore.