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Uganda’s reputation for ‘informal resilience’ is wearing thin.
With formal employment hard to come by, Ugandans have turned to informal employment, running roadside stalls, smallholder farms, and bodaboda taxis. Behind the bustling streets lies a looming crisis: more than 90 per cent of the nation’s workers fail to transition to formal jobs.
Many are growing old with no pensions, savings, or health insurance. This threatens to turn today’s adaptability into tomorrow’s calamity. At first glance, Uganda appears young. The 2025 National Social Protection Strategy, however, warns that the share of citizens aged 60 and over, about five per cent of the population, roughly 2.3 million people, will more than double by 2050.
The future seniors will have no savings to care for themselves in old age. Many work as market vendors, bodaboda riders, smallholder farmers, and casual labourers who have never enjoyed formal employment or its safety nets.
With only 28 per cent of informal workers covered by any socialprotection benefit, which is below the African average, the majority will be forced to work far beyond their productive years simply to avoid starvation. The human cost is already evident.
Physical productivity drops with age, especially in labour- intensive sectors such as farming, transport and construction. Simultaneously, health needs and medical expenses increase.
Without pensions, savings or health insurance, older informal workers face shrinking earnings and mounting vulnerability. Women are mostly at the biggest risk: nine out of ten women are in low-earning informal activities such as petty trade, unpaid family work and own fewer assets.
They have even less capacity to save, making old age poverty a distinctly gendered problem. Uganda’s social security architecture was built for a labour market that no longer exists, where the contributory pension model assumes regular wages, stable contracts, and longterm employer- employee ties.
Informal workers simply do not meet these conditions. Expecting them to plug into such a system is unrealistic. Research by the International Labour Organization (ILO) confirms that extending coverage in informal economies requires flexible contribution schedules, partial subsidies and robust public financing, alongside tax funded social pensions for the elderly.
Stakes extend beyond individual hardship. World Bank assessments across low income nations also show that ageing informal populations eventually translate into higher public costs in terms of demand for health services, social assistance, and emergency old age poverty interventions.
These costs are reactive, fragmented and far more expensive than planned social protection. Uganda is already feeling the pressure. Public health facilities are increasingly burdened with older patients suffering chronic conditions, while traditional family safety nets fray under urbanisation, migration and rising living costs.
When informal workers slip into poverty in old age, it does not only increase dependence levels on their struggling children but also the state must come in with support. The 2022 amendment of the National Social Security Fund (NSSF) Act and the 2024 voluntary contributions regulations were a step in the right direction.
They introduced pilot initiatives such as the Smartlife Flexi Savings Plan and the Livelihood Support Project, aiming to tailor savings to irregular incomes.
Private sector schemes such as Mazima Voluntary Individual Retirement Benefits Scheme and the Kampala City Traders’ Association (KACITA) Provident Fund have also emerged, though they cover only a tiny fraction of the informal workforce (about 2,500 members under Mazima) and suffer from low awareness and affordability concerns.
Coverage, therefore, remains marginal compared with the scale of informality. Uganda still has a window of opportunity to invest in inclusive social protection, as most informal workers are currently young or middle-aged, making early action far cheaper and more effective than responding later to widespread old-age crises through emergency programmes.
The policy agenda should, therefore, prioritise raising awareness of the importance of old-age protection among informal workers who often view savings as unaffordable, expanding non-contributory social pensions to provide a basic income floor and reduce poverty among older people, scaling up contributory schemes tailored to informal realities.
This can be done through mobile platforms, flexible payment schedules, and partial subsidies, and integrating social protection with labour and gender strategies to address the structural nature of informality and the disproportionate burden borne by women.
The writer is a research fellow at Economic Policy Research Centre
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