The economic impact of HIV/AIDS in South Africa is far more reaching than the effect on the price of gold.
Diane
Constituency for Africa (Washington, DC.) OPINION April 22, 2002 Chinua Akukwe And Melvin Foote
More than 28 million Africans live with HIV/AIDS, with millions of deaths expected in the coming decades. Most of the infected and dying are men and women in the prime of their lives, hitherto energetic breadwinners, technocrats, politicians, community leaders, husbands and wives. However, the effect of AIDS extends beyond a grief stricken family watching their loved one whither away. AIDS has major economic consequences. According to the World Bank and UNAIDS, by the time the rate of infection reach 20 percent in a country, prior gains in health and longevity are wiped out. We know that at least 10 African countries have 20 percent of their adult citizens living with HIV/AIDS. Food supply at household level becomes increasingly difficult as both the sick and caregivers fail to earn enough income to support their families. Families and communities come under increasing economic difficulties from prolonged sickness and lack of income. In these families, children eat less and are likely to drop out of school because of dwindling resources. These children may be forced into exploitative labor market situations to earn extra income for their families. Young female workers are particularly vulnerable to sexual abuse, and the road to prostitution may not be far away. In affected communities, as workers become sicker, businesses go under. Farm holdings deteriorate from lack of proper care. In a cruel irony, affected families are further impoverished by the high cost of funerals, including absences from work to attend burial ceremonies. As economic opportunities dry up, young people, underemployed or jobless are more likely to adopt fatalistic attitude to life, including sexual indiscretions. The cost of grandmothers, most of them living in abject poverty, catering to millions of AIDS orphans, must also be considerable. At the macroeconomic level, the World Bank and UNAIDS estimate that HIV/AIDS reduces per capita income growth in Africa by at least 0.5 percent. South Africa, the economic powerhouse of Africa and home to nearly 5 million individuals living with HIV/AIDS, will likely have its Gross Domestic Product lower by 17 percent in 2010 because of HIV/AIDS. South Africa will lose about US$22 billion if the estimated drop in GDP holds up. The economic effect of HIV/AIDS in Africa could not have come at a more perilous period in the continent. As the AIDS killing fields in Africa grew, development assistance from the rich nations fell from $32 per person in 1990 to about $19 now. Income per capita in Africa shrunk from $552 in 1991 to $474 in 2000. Commodity prices, the major non-oil exports of many Africa countries fell by 60 percent in the last two decades. Furthermore, African countries face tremendous trade barriers in America and Europe from massive agricultural subsidies. In addition, Africa also pays an estimated $13 billion a year in debt repayments, forcing countries to reduce expenditures in healthcare and education. To make matters worse, many African countries squandered their foreign exchange earnings in dubious projects and corruption. The economic impact of HIV/AIDS is just beginning since most of the asymptomatic carriers of HIV will become ill in the next few years. In the next article of this series, we will look at the effect of the epidemic on African children. Chinua Akukwe is a Member of the Board of Directors, Constituency for Africa, Washington, DC. Melvin Foote is President/CEO, Constituency for Africa, Washington, DC. -------------- next part -------------- An HTML attachment was scrubbed... URL: <../attachments/20020423/f657268f/attachment.htm>