The macroeconomic effects of HIV/AIDS in Africa are substantial, and policies for dealing with them may be controversial—one is whether expensive antiretroviral drugs should be targeted at economically productive groups of people. The authors review the evidence and consider how economic theory can contribute to our response to the pandemic
Three million people died from AIDS in 2001, making it the world's fourth biggest cause of death, after heart disease, stroke, and acute lower respiratory infection.1 Over 70% of the world's 40 million people living with HIV/AIDS are in Africa (table 1). Besides the human cost, HIV/AIDS is having profound effects on Africa's economic development and hence its ability to cope with the pandemic. While the impact of HIV/AIDS on people has been well documented, it has been much more difficult to observe the pandemic's effects on the African economy as a whole or to assess how it might affect Africa's future development. Nevertheless we need to understand these broader economic effects to form effective policy responses.
Economic research helps to estimate the effects of HIV/AIDS on the African economy and the cost effectiveness of prevention and treatment programmes
Economic theory predicts that HIV/AIDS reduces labour supply and productivity, reduces exports, and increases imports
The pandemic has already reduced average national economic growth rates by 2-4% a year across Africa
Prevention and treatment programmes and economic measures such as targeted training in skills needed in key industries will limit the economic effects of HIV/AIDS
Numbers of people (millions) worldwide living with HIV or AIDS in 20011
We used economic theory to predict what happens to economies faced with rapidly increasing mortality and morbidity. We reviewed empirical studies that have attempted to quantify the macroeconomic effects of the HIV/AIDS pandemic. We found these studies by...