Important note: Information in this article was accurate in 2004. The state of the art may have changed since the publication date.
Mail & Guardian (Johannesburg) - November 26, 2004
According to a report by the South African Business Coalition on HIV and Aids (Sabcoha) released this week, 62% of mines surveyed by the Bureau for Economic Research indicated that the epidemic is already hurting their bottom lines.
Harmony and AngloGold estimate that a third of their labour forces is infected, and Harmony, which is battling to contain expenses as the strong rand threatens the viability of some mines, reckons HIV/Aids related expenses are adding between $2 and $5 to the cost of producing an ounce of gold.
The majority of the mines surveyed characterised the impact of the epidemic on their performance as "moderate" or "severe" rather than "small".
The secondary and tertiary sectors seem to be slightly better off. Forty percent of financial services companies and 50% of manufacturers reported diminished earnings as absenteeism, the high cost of health benefits, rapid labour turnover and skills erosion increasingly burdened operations.
Banks and insurers are also worried about the impact of HIV/Aids on their customer base, but the report says generally the epidemic is having more of an impact on the production side of the economy than on demand.
Profitability in the booming retail, wholesale, motor trade, building and construction industries appears to be less affected, but according to the report, respondents in all sectors of the economy expected the problem to worsen over the next five years.
But there is little reported impact on investment decisions, with financial services and manufacturing companies reporting growing fixed investment, both local and foreign.
The survey primarily addresses companies' perceptions, rather than hard data, Sabcoha spokesperson Brad Mears concedes, and there is an urgent need for more detailed information.
"There is a dearth of information. Mining and financial services are the most advanced in terms of gathering the numbers, but some of the other sectors just aren't getting sufficient data ..."
The final extent of the impact of HIV/Aids on the economy has been the subject of debate with ING-Barings predicting the epidemic could trim 0,4% off annual economic growth, and a World Bank report predicting the almost complete collapse of African economies within a generation. "Some of that is sensationalist," Mears says "but if some of the less affected sectors don't act now they will find themselves in the position of the mines, having to pay for treatment, rather than prevention".
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