Important note: Information in this article was accurate in 1997. The state of the art may have changed since the publication date.

Reuters NewMedia, Inc. - Sunday, 23 November 1997.
Simon Denyer

Campaigners argue that AIDS is a serious threat to African economic growth, particularly as its impact is greatest on the 15 to 44 age group -- the economically most productive part of the population.

And although a new report from the World Bank plays down the impact on the overall macroeconomic variables, the effect on other measures of human economic welfare, which take into account factors such as life expectancy, education and infant mortality, is already serious and will grow, experts say.

Experts agree the effect will be most marked on the poor.

"A severe epidemic will tend to worsen poverty and increase inequality," the World Bank says.

East and Central Africa -- from Cameroon to the Congo and Sudan to Kenya -- account for 37 percent of all HIV infections in Africa, according to the World Health Organisation.

Only in Uganda is there evidence that infection rates could be levelling off or falling, due to an active government education and support programme.

Elsewhere, the disease is still spreading rapidly. The Kenyan government estimates that in 1995 1.1 million people were infected with HIV, the virus that causes AIDS. AIDS experts say that figure is likely to show a shocking increase when new U.N. figures are released on December 1.

Studies show that in 1995, up to 30 percent of pregnant women were HIV positive in Nairobi, Nakuru and Kisumu, some of Kenya's worst affected areas. In the capital's Kenyatta National Hospital, the health ministry says half the beds are taken up by AIDS patients.

ECONOMIC IMPACT FELT IN VARIOUS WAYS

The death of a significant part of the working population, and the diversion of resources from savings and investment to healthcare is bound to affect economic growth.

A 1996 study commissioned by Family Health International's AIDS Control and Prevention Project (AIDSCAP), and sponsored by USAID, suggests that Kenya's GDP could be up to 15 percent smaller by 2005 as a result of AIDS.

Already companies in Africa complain that absenteeism is rising as a result of the disease, and this is affecting productivity, says Kwame Asiedu, deputy director of the AIDSCAP African regional office in Nairobi.

The loss of trained and educated professionals -- a country's human capital - will magnify the costs.

Rurally, the effect on households can be devastating -- reducing overall household incomes by an average of up to 50 percent in families affected by AIDS, according to some studies.

ACCURATE FORECASTING IMPOSSIBLE

But the uncertainties surrounding macroeconomic forecasting make an accurate assessment of the overall impact almost impossible, according to Professor Alan Whiteside of the University of Natal in South Africa.

African economic growth is difficult enough to predict anyway, as is the future path of the AIDS epidemic, he says. Assumptions about where in society the epidemic strikes makes modelling more difficult.

The World Bank's report acknowledges these problems, but estimates a generalised epidemic could knock half a percentage point off per capita GDP per year -- a handicap, but for a growing economy, not in itself be crippling, it says.

Figures, though, can be misleading. The effect on per capita income will be smaller as population growth also falls. The World Bank points out that the death of a low income member of the community will serve to raise average income -- although not in a way that policy-makers aim for.

Economic policy analysts look increasingly beyond the raw macroeconomic numbers to assess broader measures of human development.

The UNDP Human Development Index (HDI) combines standard of living with longevity and education indices.

"When this is looked at...the impact of the epidemic is already evident and will get very much worse," says Whiteside.

In some countries in Africa, life expectancy has fallen by 10 years as a result of AIDS. In Zimbabwe, it has fallen by 22 years, U.S. Census Bureau figures show.

Average expenditure on healthcare in Africa is just one to two dollars a year, says AIDSCAP's Asiedu. AIDS care puts a tremendous burden on limited resources -- and affects the availability of healthcare for non-AIDS patients.

There are other knock-on effects -- the average cost of treating an AIDS patient in the developing world for one year could be used to educate 10 primary school children, according to the World Bank.

AIDS can also create a whole new poor underclass. The epidemic had left 200,000 orphaned children in Kenya alone by 1995 -- that could rise to a million children by 2005, according to the country's Ministry of Health.

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