TABLE OF CONTENTS

Contents

Page

Table of content. Acknowledgments.

Summary/Abstract

1 2
3

I. Introduction

2.Methods

3.Results

3.1 Social impact of HIV/AIDS

3.2 Economic Impact of HIV/AIDS 3.2.1 Micro-Economic impact of HIV/AIDS.

13 13

3.2.2 Meso-Economic Impact of HIV/AIDS

19

3.3.3 Macro-Economic impact of HIV/AIDS

20

4.Discussion

24

5.Conclusions and Recommendations

24

6.Reference List

29

SUMMARY/ABSTRACT

Since the first cases of the Human Immunodeficiency Virus (HIV)/and Acquired Immune Deficiency Syndrome (AIDS) where diagnosed in the 80s, the HIV/AIDS pandemic has become not only the deadliest epidemic in contemporary history but also a major demographic, humanitarian and development crisis. In Sub-Saharan Africa the effects of the HIV/AIDS epidemic, combined with the economic recessions of the 1980s and 1990s, have erased decades of demographic and economic progress and have seriously comp romised the living conditions of future generations. The disease has such a staggering impact because it weakens and kills many people in their young adulthood, the most productive years for income -generation and family care giving. It collapses and breaks up families by eliminating the generation that is important to the survival of societys youngest and oldest members. Infact the HIV/AIDS epidemic affects every aspect of human life. It has imposed heavy burdens on individuals, families, communities and n ations. Our review focuses on the social and economic impact of HIV/AIDS .Findings on the social impact on families, communities and rural livelihoods are devastating ranging from depletion of household income -earning capacity and of the household savings and assets with repercussions at the community and national levels. The women and the old tend to bear the burden of the disease whereas the consequences are most felt on the orphans with the compromising of their education, health and nutrition. S ocial gaps are widened and gender inequalities further aggravated with the female at a more disadvantage. The economic impact of the pandemic is visible both at the household and family levels as well as at the macro-level not neglecting the severe effects it is imposing on for-profit enterprises and some other economic sectors. Thus, it is of paramount importance to understand the impact of the pandemic, to present the current state of knowledge of its impact, to identify areas where research is vitally needed as well as were intervention needs to be focused to halt and start to reverse the damage caused by this deadly condition.

I.INTRODUCTION

Since the first cases of the Human Immunodeficiency Virus (HIV)/and Acquired Immune Deficiency Syndrome (AIDS) where diagnosed in the 80s, the pandemic has become not only the deadliest epidemic in contemporary history but also a major demographic, humanitarian and development crisis. It has taken a devastating toll and reached such a dimension that along with other global problems, it has become central impedance for achieving development in many affected countries worldwide and Sub Saharan Africa in particular 1. Throughout history, few crises have presented such a threat to human health and to social and economic progress as does the HIV/AIDS epidemic. The socioeconomic consequences of HIV/AIDS in high prevalence countries are devastating and far-flung. The effects are multisectorial and felt throughout the society and the economy. Sub-Saharan Africa (SSA) remains the worst affected region in the world. The escalating rise in the cases of HIV/AIDS infection has subjected the authorities of Sub Saharan Africa with a challenge for which they are ill -prepared as with the limited resources, they are struggling to alleviate the plight of infected and affected families, and communities concomitantly with trying to contain the infection. Though a little more than one-tenth of the worlds population resides in SSA, it is a niche to the almost 70% of all people livin g with the virus (24.5 million).Two million of them are children younger than 15 years of age and an estimated 2.7 million people in this region become newly infected while 2.0 million adults and children have died of AIDS2. In 2005 about 12 million orphans were living in SSA3. HIV/AIDS differs from other epidemics in that it is slow acting. The slow evolution of the impact of HIV/AIDS disguises the immediate general effects thus no pressure to mount a strong public health campaign at an early stage becau se the disease remains invisible for many years .However the cumulative effects registered over the years are
2

already producing, and will continue to produce significant changes across the continent. However, many governments have gained consciousness in t he magnitude of the consequences and effects of HIV/AIDS and together with internal bodies are putting in place strategies to halt and the reverse the trends.However, these will only result in distance palpable results as the effects of today are the con sequences of yesterday. In our paper review we will try to highlight the major impacts of the pandemic at the household, community and national levels in Sub -Saharan African countries. Specifically we will bring out: social impact of HIV/AIDS in familie s and communities and Rural Livelihoods impact of HIV/AIDS on girls and women microeconomic Impact on households and communities meso-economic impact of HIV/AIDS macroeconomic impacts and implications

2.METHODS This paper is a review of the social and economic impact of the HIV/AIDS in Sub Saharan Africa .Our major data sources were Medline via Pubmed, Google search engine and electronic resource catalogs in the Luniversit Libre de Bruxelles library at Erasmus campus. We logged in to Pubmed via Google and searched for the key words: social impact, economic impact, in different combinations with HIV/AIDS in Sub -Saharan Africa. Most of the Medline articles were free abstracts in English from 19 85 to 2008. We got 1580 articles on logging for impact of HIV/AIDS. Filtering our search by limiting the effects to socioeconomic impact we were left with 159 articles and further limitation of the search to the impact in Sub -Saharan Africa narrowed our results to 58 articles. Related articles cited in these papers were sought for and added to those found directly from pubmed.Other related articles seen in databases not found in
3

the ULB library were searched for directly via the Google search engine . After thorough scrutiny and sorting we were left with 72 articles closely related to our topic. To ensure coverage of the whole region of Sub-Saharan Africa, we ensured there was at least an article to give the situation of each of the countries in Sub -Saharan Africa directly affected by the epidemic or at least at article from each of the sub -regions.

3.RESULTS

In our review on the search for the socioeconomic impact of HIV/AIDS in Sub -Saharan Africa, more than a hundred articles related to the subject were found. After scrutiny an initial number of more than a 100 articles were selected from which we retained 72 relevant articles after reading of the abstracts. These studies were classified according to social impact, micro-, meso- and macroeconomic impacts of the HIV/AIDS pandemic in Sub-Saharan Africa. These studies range from cohorts, case control studies, hea lth surveys to paper reports. From these, our findings were that the rapid spread of HIV has been facilitated by various factors related to poverty, inequality, gender inequality, labor mobility and ethnic fractionalization. But what has enabled HIV/AIDS t o undermine economic and social development is the erosion of some of the main determinants of economic growth such as social capital, domestic savings and human capital. Through such channels the HIV epidemic has been transformed from a health issue into an economic disease that impairs economic and social development 1. Because it prevents an increasing share of the population from participating in economic growth, the HIV/AIDS epidemic increases poverty and vice versa 4.

3.1SOCIAL IMPACT OF HIV/AIDS

3.1.1THE IMPACT ON FAMILIES, COMMUNITIES AND RURAL LIVELIHOODS

Though house-level and community-level impacts are serious, there are relatively few data on them from which could make the following observations: -The presence of HIV/AIDS in a household quickly results in depletion of household income-earning capacity and of the household savings and assets. The impact of adult illness and death and the way households cope suggest that individuals and households go through processes of experimentation and adaptation as they cope with the immediate and long term demographic changes 5, 6, 7, 8 (see table 1) -The poorer the households and communities, the worse the impact. The effect of illness and death on poverty in households depend s on the number of cases the household experiences; the characteristic of the deceased individuals; the households composition and asset array; community attitude towards helping needy households and the general availability of resources and broader resou rces available for assistance to households 9. The effect of the HIV/AIDS morbidity and mortality puts enormous strain on the capacity of families to cope with the psycho -social and economic consequences of illness, such that many families experience distr ess and often disintegrate as social and economic units 10 .Table 2. Shows a summary of the impact of HIV/AIDS at the household level.

Table 1. The three stages of loss of management

Stage

Loss of management strategy

Reversible mechanisms and Seeking wage labour or migrating temporarily to disposal of self-insuring assets find work -Switching to producing low maintenanance crops (usually less nutritious) -Liquidation of savings -Tapping obligations from extended famil y or community members -Soliciting family or marriage remittance -Borrowing from former or informal sources of credits -Reducing consumption Disposal of Productive assets Selling land, equipment or tool Borrowing at exorbitant interest rates Further reducing consumption, education or health expenditure Reducing amount of land farmed or crops produced Depending on charity Breaking up households Destitution Distress migration Source: Donahue, 1998.

Table 2. Impact of HIV/AIDS at the household level

Production and Earnings

Investment and Consumption

Household health And Composition

Psycho-social cost

Reduced Income

Medical costs

Health maintenance Activities reduced

Loss individual motivation

of

Reduced Productivity Funeral costs

Loss of individual motivation

Grief survivors

of

Reduced Labour Use of land

Legal fees Loss savings Changes and investment in

Loss of deceased of Poor health of survivors Dissolution of household

consumption

Source: Poku, 2001.

The Burden of care: Women and girls tend to provide most of the care for sick individuals and most these care-givers are older women 11, 12. Care-givers report regular concern about inadequate food and clothing, high cost of medical bills and inability to pay school fees for orphans. Older care-givers deteriorate as a result of physical and
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emotional stress of assisting the children. The burden of care on households is significant with some caregivers devoting four hours a day to caring for sick relatives, plus the time taken to accompany the sick relative to the health facility 13. This time devoted for care giving comes on top of the regular work and may even double in terminally ill patients 14. Care giving involves opportunity cost as the time devoted in care giving is often set off from work or income generating activities 15.

Orphaned Children: HIV/AIDS potentially worsens the childrens health, nutritional status and educational attainment beyond the effects of direct vertical transmission. Children living in a household in which the mother or another household member is HIV-positive have higher morbidity and lower nutritional status and educational attainment than children in unaffected households, even if they are not directly infected16,17,18,19 .Children express stress seeing a dying parent which may leave them feeling abandoned and increase susceptibility to sexual abuse. Some are sent to live elsewhere while others are forced by foster parents into child labour whereas others work out of economic necessity. In a UNICEF report of 2006 observed that in most doubled orphans households, children headed the homes, while some lived in the streets 3 .Their education is cut short just as their future economic opportunities are compromised 20, 21.

Noteworthy are changes that occur in extended family systems. Families which have little contact with their extended family have a greater likelihood of orphans being abandoned should the current caregiver die.A WHO report in 2002 showed that the burden of support for families and family members falls to the older adults and in most rural areas to grandmothers.

Dissolution of households: Studies have shown that a significant number of households cease to exist especially if the woman is the deceased. After the death of both parents, orphans either care for themselves or likely to live with relatives and the deceased wife more likely to be replaced 15 .However, children from the previous marriage may still be sent away and so remarriage does not necessarily mean that members of the original household stay together. A study by Hosegood in 2003 showed that households where an adult member died of HIV/AIDS or related causes were three folds more prone to dissolution by the end of the year than other households 22.

The feminization of HIV/AIDS: Women comprise an increasing proportion of people living with HIV/AIDS worldwide. Global prevalence among women has accelerated from 41 per cent of infected adults in 1997 to 50 per cent in 2002. In sub -Saharan Africa, women account for almost 6 out of every 10 persons living with HIV/AIDS2 .Among youths, this gender gap is exasperated. Seventy -ve per cent of all young people living with HIV are female 2. Impact of household illnesses and deaths causes and imposes greater sacrifices by the fema le. Women are especially vulnerable in HIV/AIDS-affected households. Usually, they care for the sick and dying in addition to maintaining heavy workloads related to provisioning and feeding the household. Women are more likely to be illiterate, of lower socio-economic status and have fewer legal rights, which combine to limit their access to resources and social services. HIV/AIDS does not only deepen but intensifies gender inequalities: -Women have to give up jobs and income earning activities to cater for a sick spouse or relative23. -Care giving burden falls essentially on the woman and even extends to loss of assets and properties upon the death of the spouse. She might lose land and even be denied right to use it unless the husband left a will. In some societies, socio-cultural practices, such as a widow not being able to maintain access to or benefit equitably from the property of her deceased husband, may further aggravate problems. She experiences loss
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of cash income, loss of access to support services that traditionally go with men such as agricultural services and loss of farm production knowledge for work done by men 24, 25. -Girls tend to be withdrawn from school earlier than or rather than boys to assist in care giving, household chores and family income support or because the family couldnt afford to pay school fees 26. -Sexual abuse and exploitation usual occur upon the death of husband. The widow may experience enforced relationship with the late husbands brother or other male realtives, rejection to which may culminate in her ejection from late husbands home. The family in trying to cope with loss of an adult member might encourage the teenage daughter in to marriage to gain financial assets of the dowry 27. Poverty, tradition and social pressure tend to limit women's ability to express their wishes regarding choice of sexual partners and "safer-sex" practices.These together with other factors may partially explain the disparity in HIV infection rates amongst adolescent boys and girls 11, 28. -In female headed households, the woman experiences increase workload as they struggle to meet basic needs, take sole responsibility over the children with limited external support. Distress sales and dispossession of property increases to cope with the loss of the adult male labour and income 29 .

3.2 ECONOMIC IMPACT

3.2.1 MICROECONOMIC IMPACT OF HIV/AIDS

Classically, a downward spiral of the family/household's welfare begins when the first adult in a household falls ill. There is increased spending for health care, decreased productivity and higher demands for care. Food production and income drop
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dramatically as more adults are affected. Once savings are gone, the family seeks support from relatives, borrows money or sells its productive assets. Frequently, children are forced to discontinue schooling, as the family needs help and cannot pay school expenses. Time dedicated to child care, hygiene, food processing and preparation is sacrificed. When the AIDS patient dies, expenditures are incurred for the funeral and the productive capacity of the household is reduced. The income -generating abilities of the family are undermined adding to the work burden of surviving family members 7. (See Table 1 above) In the next stage, the partner becomes sick and the downward spiral accelerates. The household is eventually reduced to impoverished elderly people and childre n. These individuals may have limited decision -making power and access to resources, as well as less knowledge, experience and physical strength which are required to maintain a household. Relatives may be unable to care for children whose parents have die d. The family may experience rapid transition from relative wealth to poverty this depending on the familys pre-HIV financial situation, size and social position of the household.HIV results in Loss of Income, Shift in spending, widening and deepening of poverty30, 31, 32,33. The two major economic effects are a reduction in the labor supply and increased costs: Labor Supply: The loss of young adults in their most productive years will affect overall economic output If AIDS is more prevalent among the economic elite, then the impact may be much larger than the absolute number of AIDS deaths indicates. Costs: The direct costs of AIDS include expenditures for medical care, drugs, and funeral expenses

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Indirect costs include lost time due to illness, recruitment and training costs to replace workers, and care of orphans If costs are financed out of savings, then the reduction in investment could lead to a significant reduction in economic growth. The economic effects of AIDS are felt first by individuals and their families, and then ripple outwards to firms and businesses and the macro -economy.

Economic Impact of AIDS on Households 34

The household impacts begin as soon as a member of the household starts to suffer from HIV-related illnesses: There is loss of income of the patient (who is frequently the main breadwinner) with decrease asset, wealth and long term economic insecurity Household expenditures for medical expenses may increase substantially, resulting a shift in spending and a decrease spending for other basic necessities 35, 36. Other members of the household, usually daughters and wives, may miss school or work less in order to care for the sick person. Death results in: a permanent loss of income, from less labor on the farm or from lower remittances; funeral and mourning costs; and the removal of children from school in order to save on educational expenses and increase household labor, resulting in a severe loss of future earning potential 22,24,26,35,36,37,38,39,40,41. Mead Over .in Tanzania showed that 8 percent of total household expenditure went to medical care and funerals in households that had an adult death in the preceding 12 months42. Bechu34 in Cote dIvoire showed that households with an HIV/AIDS patient spent twice as much on medical expenses as other households whereas Menon 8 in Uganda showed that the economic impact of HIV-related deaths was stronger than other types of death,
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as households lost much of their savings in order to pay health care and funeral expenditures. In Ethiopia, Demeke, M. in 1993 as quoted by John Stover, 2003 in a study of 25 AIDS-afflicted rural families found that the average cost of treatment, funeral and mourning expenses amounted to several times the average household income43.

Economic Impact of AIDS on Agriculture and Rural Livelihood

The rural settings home to a significant portion of the African population are now the hard hits of the HIV pandemic with the most remote areas bearing the brunt 44. Most people in Africa continue to live in or have strong connections to rural areas that rely principally on agriculture for subsistence. In most of the highly -affected countries, agriculture provides a living for the large majority of the population. Studies done in most African countries have shown that AIDS has an adverse effect on agriculture, including loss of labor supply and remittance income 45,46,47,48,49. The loss of a few workers at the crucial periods of planting and harvesting can significantly reduce the size of the harvest. In countries where food security has been a continuous issue because of any adverse conditions, any declines in household production can have serious consequences. Additionally, a loss of agricultural labor is likely to cause farmers to switch to less-labor-intensive crops. In many cases this may mean switching from export crops to food crops 50. Thus, AIDS could affect the production of cash crops as well as food crops.(Table 3 and Figure 1)

Table 3 Reduction in Market Output in AIDS-Affected Households,Zimbabwe

Crops Reduction in market Output(%)

Maize

61%

13

Cotton Vegetables Groundnuts Cattle Owned

47% 49% 37% 29%

Source: Kwaramba et al.,1997 51

Agriculture, particularly food production, is affected in several ways by HIV/AIDS. First, there is a toll on the agricultural labour force. Food and Agricultural Organization has estimated that in the 27 most affected countries in Africa, 7 million agric ultural workers have died from AIDS since 1985, and 16 million more deaths are likely in the next two decades. In the ten most affected African countries, labour force decreases ranging from 10-26 percent are anticipated 50. HIV/AIDS increase rural poverty and people already impoverished face even more desperate situations as HIV saps their limited labour supplies and assets 52,53. HIV/AIDS affects rural livelihoods via loss of labour for income and food production in ill persons and caregivers. Chronic illne ss curtails the work that can be done by increasing time off-farm, reducing production and thus diminish income earned 54. During this time disinvestment results with a spend down of savings and selling of assets to compensate for the lost income and new ex penses25,55. The burden on rural households increases when some urban residents who are ill return to their rural homes, thus aggravating existing situation. HIV/AIDS imposes labour and financial pressures on the agricultural production of households with a shift in production from cash to food crops with an even further reduction in variety and quantity of latter 12. Death of adult head leads to loss of acquired knowledge of farming practice as inheriting family members who have to assume new responsibilit ies for farming often
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do so without an adequate understanding of livestock care, soil and plant types or land preparation methods.
50 45 40 35 30 25 20 15 10 5 0

N -AIDS-Related deaths AIDS-Related Deaths Reducti i area u d er cultivati Reducti i cr yield L ss f re itta c e due t death f e ber f h useh ld

Source :FAO Committee on World Food Security,2001 50 Figure 1 Impact of AIDS-Related death on crop production and household
incomes,Swaziland.

Economic Impact of AIDS on Health, Education, Transport and Mining, Livestock

AIDS will also have significant effects in other key sectors. Among them are Health, Transport, Mining, Education and Water and Livestock. HEALTH: AIDS affects the health sector in two ways: (1) it has increased the number of people seeking services .The number of AIDS patients seeking care is already overwhelming health care systems and in most African hospitals it accounts for 50% of bed occupancy . (2)it increases the cost of health care as it is expensive to take care of AIDS patients than for other conditions. Treating an AIDS patient for one year is about as expensive as educating ten primary school students for one year 48. EDUCATION:

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John Stove noted that AIDS affects the education sector in at least three ways: -The supply of experienced teachers will be reduced by AIDS -related illness and death -Children may be kept out of school if they are needed at home to care for sick family members or to work in the fields; and -Children may drop out of school if their families cannot afford school fees due to reduced household income as a result of an AIDS death 48 TRANSPORT and MINING SECTORS: The transport sector is especially vulnerable to AIDS and is one of the hard hit of HIV/AIDS. The mining sector is a key source of foreign exchange for many countries. Most mining is conducted at sites far from population centers forcing workers to live apart from their families for extended periods of time. They often resort to commercial sex. Many become infected with HIV and spread that infection to their spouses and communities when they return home 48.

LIVESTOCK29 The impact of HIV/AIDS on livestock sector is as summarized in the frame below(figure 2).

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Source: Engah, 2000 29.

3.2.2 Meso-Economic Impact of AIDS on Firms ( Effects on For-Profit Enterprises)

AIDS may have a significant impact on some firms. AIDS-related illnesses and deaths to employees affect a firm by both increasing expenditures and reducing revenues. Expenditures are increased for health care costs, burial fees and training and recruitment of replacement employees. Revenues may be decreased because of absenteeism due to illness or attendance at funerals and time spent on training. La bor turnover can lead to a less experienced labor force that is less productive 49, 56. (See table 4.) Roberts et al. in one study examining several firms in Botswana and Kenya showed that the most significant factors in increased labor costs were absenteeism due to HIV or

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AIDS and increased burial costs 57. A similar study by same authors in Zimbabwe found that the major expense was health care costs. Roberts et al. in other studies have examining the total annual cost of AIDS to different companies, as well as the annual cost of AIDS per employee found that the annual cost of AIDS per employee varied from US$17 to US$300.Increased labor costs can reduce the profits necessary for expansion resulting in a considerable impact on profit 57. Table 4: Impact of HIV/AIDS on Firms.

Factors

leading

to

Increase Factors revenue

leading

to

decrease

Expenditure

Health care costs Burial fees Training and recruitment

Absenteeism due to illness Time off to attend funeral Time spent on training Labor turnover

Source: Stover & Bollinger, 2006 43.

3.2.3 MACROECONOMIC IMPACT

Whiteside (2002) rightly made the observation that macro -economic impact takes longer to evolve and the scale and magnitude of macro-impact will depend on the scale and location of micro-level impacts 58. There is no threshold at which the social and economic impact of HIV/AIDS becomes visible as a result of the slow-acting nature of the epidemic whose
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consequences only become overt when it is late to avoid economic and developmental damage. In a World Bank study of the economic impacts of AIDS in Africa Oval et al (1992) concluded that though the macroeconomic impacts of AIDS could be significant, a lot could still be done to mitigate the economic impact of AIDS 59. The following indicators are used to assess its macroeconomic impact: Life expectancy, Development, Gross Domestic product. Life Expectancy: Life expectancy is an indicator used here as it strong ly correlates with various economic and health variables. Many studies have shown that the life expectancy decreases as the HIV prevalence increase. Poku showed that the life expectancy increases for all countries where the adult prevalence rate was less t han 5% but declined once the HIV prevalence rate reached 5% 10. Development: HIV affects socioeconomic development through a number of channels at macro and micro levels. Development is undercut through the loss of human capacity, deterioration of performance of key organizations (revenue departments, ministry of education and health) and fragmentation of vital economic networks . These have a non-linear, incremental impact on economic growth -the longer they persist, the more difficult/costly recovery becomes. Gross Domestic Product: A number of studies that have used quantitative estimates to model how the multiple effects are likely to impact on the long -term economic growth of Africa have shown that there will be a decrease in the GDP in HIV/AIDS affected countries as compared to a non -AIDS scenario with decrease ranging from 0.2% to 20%.(see Figure 3) (see table 5) A more sophisticated World Bank study in South Africa that used newgeneration model incorporating a broad ran ge of retrogressive effects than earlier models suggested a shrinkage by a third by 2078 because of HIV/AIDS 60 Beyond the level of aggregates (i.e. GDP) ,rational economic logic suggests that Africa will face larger economic looses with reductions in labour force due to declining life expectancy which in turn will adversely affect output ;an impact that will be
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compounded by reduction in productive efficiency associated with increased incidences of ill health and shortages of critical skills. In additio n, such decline in economic activity will take place against a background of rising social service expenditure, straining governments budgets, reducing savings rates as well as increase poverty. These will indirectly reduce the governments ability to rai se revenues61, 62. The effect of the impact of HIV will depend on the countrys initial economy before HIV and the prevalence. Whatever the case, infected countries will sink in to the vicious cycle of HIV and poverty whereby HIV/AIDS reduces e conomic growth and increases poverty, which in turn accelerates the spread of HIV. Without strong and immediate actions, it will prove quite difficult to overcome the cost of inaction latter on35.
Table-5. Comparison of Macro-Economic Studies
Predicted Impact Author Forecast Period 1990-2025

Africa(thirty countries) GDP growth rate falls by Over59 (1992) 0.6 to 1.5% Cameroon GDP growth rate falls by Kambou et al.63(1992) 0.5 to 1.2%

Tanzania

Malawi Botswana Mozambique South Africa

GDP growth rate falls from Cuddington64(1993) 1995-2010 3.9% without AIDS to 2.83.3% GDP growth rate is reduced Cuddington and 1995-2010 65 by 0.2 to 1.5% Hancock (1994) GDP growth rate is reduced BIDPA66(2000) by 3.9% to 2-3.1% GDP growth rate falls? Arndt67(2002) By 2010 GDP is 17% Arndt smaller than it would be Lewis68(2000) otherwise Per capita growth rate falls Bonnel 62 (2000) by 0.8% for Sub-Saharan Africa Countries 1996-2001 1999-2010 and 1997-2010

Developing Countries (Africa)

1997-2010

Source: Poku N.K, 2001 10

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Source: Malcolm F. McPherson 69.

Figure 3 Macroeconomic Projections of the impact of HIV/AIDS

G[Y (t)] = GROWTH OF AGGREGATE INCOME. A This is the rate assumed for South Africa without AIDS. B - Consistent with results in ING BARINGS (2000); ABT ASSOCIATES (2000); ARNDT AND LEWIS (2000); and BER (2001). C - Consistent with BONNEL (2000) which shows that the decline in the growth rate tapers off as the HIV prevalence rate increases from 5 to 3 0 percent. D - Occurs when retrogressive effects cumulate.

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4. DISCUSSION

Major differences of opinion are emerging in assessments of the socio -economic impact of HIV/AIDS in heavily affected countries between the experiences of those who are devising practical responses to the pandemic, and forecasts based on macroeconomic modeling. Perhaps the empirically most well-established and uncontroversial effect has been found at the individual level and for people at the AIDS stage of the virus. Studies found significant negative effects on the patients capacity to engage in income -earning activities39 By contrast, empirical evidence of the impoverishing effects of AIDS deaths on African households is unexpectedly limited. Menon et al., 2002 and Steinberg et al., 2002 in their studies of household impact of AIDS-related morbidity and mortality on income and expenditure emphasized the gaps in this literature 8, 15. Several studies have found that affected households are not uniformly poorer than non -affected households 70, 27. Beegle et al., 2008 in one study found that effects may be present in the short -run but do not persist in the long-run71. Also in areas with surplus labor, working hours in households might not increase either during illness or after a death. In our review we found an extensive descriptive and speculative literature on orphans probably largely motivated by strong previous assumptions that the orphan effect would be negative and large 16, 17, 18, 19. Perhaps it is surprising, then, that the findings from empirical studies of schooling and health are often mixed. Among the handful of studies which allow for inferences of causality, we do find a significant negative impact of parental death on child school ing20,27,71.Those that examine fathers and mothers death separately found that maternal deaths are causally linked to decreases in schooling, whereas paternal deaths are not; although they may be correlated with lower schooling20,21. Because of the short duration of most studies, they usually assess the

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impact on the probability of attending school but are unable to measure the impact on completed years of schooling. . Few studies were found on the effect of HIV/AIDS on gender. However the limited studies found reveal a greater vulnerability of the female sex to the epidemic. In addition HIV widens and intensifies the gap of gender inequalities already in existence 2,
9, 24, 26

. At the micro economic level, a lot of publications were found and most showed

that HIV had two major economic effects which were a reduction in the labor supply and increased costs though the magnitude of the reduction and the cost differed across different settings30, 31, 32, 33. Concerning the impact on agriculture, Studies done in most African countries have shown that AIDS has an adverse effect on agriculture, including loss of labor supply and remittance income 43, existing food crisis in many countries. Most of the studies on the impact on health and education demonstrated the moderate to severe impacts of AIDS on these sectors which varied with the prevalence of HIV in the country in question. Studies of the impact on private firms and enterprises revealed varied severity with the impact felt more by smaller firms and firms in some key sectors such as transport and mining more likely to suffer larger impacts than other sectors. This stems from the scarcity of trained personnel in these domains and physical technicity involved in the execution of their work49,56. In our review most of the studies on the macroecononomic impact of HIV/AIDS used economic models .Most studies of the impact on eco nomic growth have been characterized by showing mixed results 60,68 ,consensus about the negative and substantive effects30 and lack of consensus on the link between AIDS and economic growth71 . Despite this inconclusiveness, one study bluntly states A survey of recent writings on the interactions between the AIDS epidemic and livelihoods in Africa leaves one with
23
44, 45,46,47,48,51,52,53

. A report by the

Committee on World Food Security, 2001 showed that these effects may worsen the

the impression that development practitioners, academics, and even casual observers of developments in Africa are hell-bent on pinning most of Africas economic stagnation on the AIDS epidemic 70 Many of the studies estimate large declines in gross income or declining growth in income, which are offset in large part by slower population growth. In addition to this effect of smaller population, the per capita income standing of surviving households could theoretically rise through increases in labor scarcity, which, in turn, increase wage rates10. Studies that developed on macroeconomic models that include intergenerational effects on human capital accumulation such as school attainment of orphans found large negative effects on national per capita income 60.On the other hand ,Young in 200572 found that a reduction in population could result in higher per capita consumption possibilities. Limitations: The search for articles for this review (in Medline) was limited to free English language publications. This is a limitation as articles published in other languages were excluded from this review. However, the fact that the vast majority of the scientific works that are published worldwide is in English is strength of this review. We did not consult social science or economic experts in the field AIDS for their opinion or ask them to provide us with updated unpublished works. We recommend that future reviewers should consult experts in this field and efforts should be made to include results of studies published in other languages as well.In our review, numerous articles and papers are addressed towards a particular point of view, which from a neutral position is not appropriate. This stems from the relatively few publications found in some domains. Nevertheless inside the vast amount of publications, this slope creates equilibrium between conflic ting opinions. The strength of these studies is that the we could easily review the effect on HIV/AIDS. The use of studies done by different people at different times in different places giving similar results adds to the credibility of our findings.

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5.CONCLUSION and RECOMMENDATION

Since its onset in 1981 when the first AIDS cases were reported, the human immunodeficiency virus epidemic has been threatening the social fabric of societies in the most affected countries and eroding the social and economic safety net. Households are the first units affected by the HIV/AIDS epidemic. The death of a breadwinner may lead to the impoverishment of the household. Children are being taken out of school to care for ill parents or for financial reasons whereas grandparents are acting as surrogate parents to care for their grandchildren. HIV/AIDS is also having a sizeable impact on the labour force, costs and productivity of business firms in the areas with high HIV prevalence. The impact of HIV/AIDS on agriculture is also considerable in the most affected countries. Indeed, the impact in this sector will be far-reaching and threatens the future food security of areas or entire countries. The health sector is often heavily impacted by HIV/AIDS. The increase in the number of persons seeking medical services and the higher costs of health care for AIDS patients are crippling the already inadequate health systems of the most affected countries in the developing regions. The sector is also losing its personnel to the disease, caring for AIDS patient s is stressful for the medical staff. In the education sector, the pool of qualified teachers is also shrinking in countries or areas with high HIV prevalence. Overall the impact of HIV/AIDS on the economy and development is likely to intensify in the near future. So far, the studies on the impact on macro -economy points at least to the difficulty in estimating the real impact of AIDS on the economy. Some studies found that the impact of HIV/AIDS on the growth of GDP was marginal, although most found that there would be a substantial negative effect on the economies of countries where HIV prevalence is high. Other studies point out the shortcomings of GDP for assessing impact of HIV/AIDS on economic welfare and development.
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Most of the available studies on the impact of AIDS on the economy covered the southern part of Africa and few studies are available on West Africa. This may be explained by the relatively low prevalence of HIV/AIDS in these regions less availability of publications from these areas. Thus, the organization of studies in these regions should provide insight on the ways in which the HIV/AIDS epidemic affects development under diverse socio -economic and cultural conditions. Equally important are the long incubation period of the disease and the different waves of the epidemic, from HIV infection to AIDS mortality. Many countries are still experiencing a rapidly rising prevalence of the HIV and the effects will play out over many years. This makes it difficult to observe empirically and at a global level the magnitude of the impact of AIDS on the economy. In the most affected countries, the HIV/AIDS epidemic exacerbates existing problems and dysfunctions of the socio-economic system of a region or a country. These countries are already faced with many obstacles on their road to development, including famine, war and inefficient governance and illiteracy to name a few. Poverty, illiteracy and other health programs are also demanding attention whilst the HIV/AIDS epidemic is causing unforeseen ravages. Mitigating policies and programmes need to be devised and implemented in order to ease the suffering of entire population and future generations. Only prevention, treatment and increased support will allow the countries affected and the international community to reverse or at least reduce the dire predictions of the implications of the HIV/AIDS epidemic .

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