ADDIS ABABA, Nov 22 (AFP) - With more than 23 million people in sub-Saharan Africa infected with HIV, the continent needs annual grants of between two and 10 billion dollars to fight the spread of AIDS, according to a UN study.

Caring for people with AIDS is simply too expensive for African states, according to the study by the Economic Commission for Africa (ECA) released during a ministerial development conference here.

Given the already huge level of external debt across Africa, this money should be provided as grants, not new loans, the ECA said.

Zambia, where almost 20 percent of adults are HIV positive and whose external debt stands at about 6.5 billion dollars, cannot borrow more money to meet its most important needs such as AIDS programmes, President Frederick Chiluba told donors Tuesday.

Poverty and income disparity will probably increase in Africa, according to the ECA, because the AIDS pandemic slows economic growth. And as poverty levels continue to rise, so the HIV virus will spread further among the most disadvantaged.

In its two-yearly study on the global economy, the International Monetary Fund predicted in September that the AIDS pandemic would lead to a five percent reduction in growth in the most affected countries in sub-Saharan African states.

For the ECA, the level of official development aid earmarked for AIDS is "woefully inadequate."

The UN body dedicated to fighting the disease, UNAIDS, agrees, saying that the 150 million to 200 million dollars received by Africa every year for that purpose is not enough.

In 1998, AIDS killed almost 1.84 million people in Africa, more than war and malaria, according to the World Health Organisation.

The ECA reported that half of the people in the world with AIDS live in eastern and southern Africa.

Experts are particularly concerned by the fact that the disease tends to affect those aged between 15 and 40, the most economically active sector of the population, and therefore it hampers development.

"The fact that the victims of the pandemic include the most productive age groups, most of whom are professionals who have been trained with a lot of resources, exerts an additional budgetary strain," Organisation of African Unity chairman Salim Ahmed Salim told the development conference on Tuesday.

AIDS is estimated to cost east and southern Africa one to two percent of gross domestic product (GDP) annually because of the demographic changes caused by increased mortality.

As states spend more on health care and earn less through fiscal revenue, treasuries will lose out, according to the United Nations.

Aside from significant external aid, experts also back the need for facilitating access to cheaper generic medicines used to treat those who are HIV positive and to delay the onset of AIDS.

Africa's development partners should actively push for the production of these medicines, the ECA urged.

The pandemic will be the focus of talks here from December 3 to 7, during the second African Development Forum, whose central theme will be "AIDS: the greatest challenge for leaders."

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