Since the early 1990s, Uganda embarked on a series of structural reform policies and investments designed to free up markets, stimulate private investment, and encourage competition. The rate of economic expansion, which averaged around 7.6 percent a year from 2006 -2010, fell to 5.5 percent from 2011-2013. This slump in growth and the high rate of inflation (averaging 23.5 percent in 2012) were largely as a result of the global economic turbulence, higher food and oil prices, together with slippages in fiscal and monetary policy (World Bank, 2013).

Nonetheless, Government’s expectation, in the medium-term scenario, is that the rate of growth will exceed the historical rate of 7 percent, driven predominantly by oil production, along with productivity gains in Agriculture and increased trade with the East African Community (EAC) through greater integration and harmonization (IMF 2013, the World Bank 2013).

Uganda’s labour force consists of 15 million individuals with Agriculture accounting for 73% of the labour force employed in 2010. About 95 percent of the 11 million people working in Agriculture are informal workers. Within the services sector, 80 percent of the jobs are in the non-wage/informal sector jobs, mainly in low-productivity retail trade. Other sectors that employ relatively large numbers include the manufacturing sector (500,000 people) with about 60% of these in non-wage manufacturing. Construction accounts for 1.6 percent of the workforce (about 250,000 people). However, over 90 percent of workers are in wage employment sector.

The challenge Uganda faces is to increase the number of jobs in the more productive sectors, shifting people out of Agriculture into services and industry, while at the same time putting in place interventions, which will enhance productivity in Agriculture.

The Business, Technical and Vocational Education and Training (BTVET) sector has the potential of providing the largest number of skilled employees to increase Uganda’s productivity. However, the sector has suffered from weaknesses in five major areas. These include; relevance to economic growth, quality of skills provision, access and equity, organizational effectiveness and financial and internal efficiency. The system does not produce the appropriately skilled workforce that Uganda requires to increase income and employment and to compete internationally. The training institutions do not deliver training commensurate to the required standards and few students access the training.

Given these enormous challenges, a sector-specific approach to developing skills across a continuum from the informal sector to medium and large formal sector enterprises and targeting both new entrants to the labour force and existing employees, is appropriate. Such an approach will allow the Government to test out strategies and interventions to reform the public institutions and courses targeting particular sectors, involve the private sector in training and delivery and set up the system level mechanisms for responding to labour market needs and ensuring quality. If successful, the approach will be scaled up in the future to meet the demands of the growing economy through the provision of an adequately skilled and adaptable workforce.

This is why the Government of Uganda through Ministry of Education and Sports (MoES) launched a BTVET Strategic Plan 2012/13 to 2021/22 entitled "Skilling Uganda". This plan underscored a paradigm shift in skills development in the country. It emphasized creating employable skills and competencies relevant to the labour market rather than educational certificates as was before.

The Uganda Skills Development Project (USDP) worth USD $100M was initiated by the Government of Uganda through the Ministry of Education and Sports, to implement foundational reforms that would operationalize the BTVET strategic Plan. USDP is a five (5) year project funded by the World Bank; it was approved in April 2015 and became effective in October 2016. USDP targets enabling programs to meet skills needs in key priority sectors of the economy i.e. Agriculture, Construction and Manufacturing, in line with Uganda's National Development Plan (NDPII) as well as Vision 2040.