of HIV/AIDS on the macroeconomic environment takes two dimensions, namely the
direct and indirect costs (Balyamujura et
al, 2000: 14).
Direct costs are the costs of treatment associated with HIV related illness. They usually have serious implications for health care budgets, since the government has to pour out a lot of money to cover the growing population of the people infected and affected by HIV/AIDS – this may lead to the increase of taxes and/or cutting the budget of other departments to finance.
costs refer to loss of value of production, the loss of current wages, the loss
of the present value of future earnings, training cost of new staff, high staff
turn-over, cost of absenteeism, higher recruitment costs, the drainage of savings,
amongst others. However, such indicators are very difficult to measure since
they can also be affected by other factors in the economy.
has identified seven ‘key impact channels’ that link the demographic effects of
AIDS to the South African economy (2000):
A lower labour force
Lower labour productivity through
absenteeism and illness
Cost pressures for companies through
benefit payments and replacement costs
Lower labour income, as employees
bear some of the AIDS-related costs
Lower population translating into
Increased private sector demand for
Higher government expenditure on
‘The impact of HIV and AIDS on Africa’s economic development’ by Simon Dixon, Scott McDonald and Jennifer Roberts suggests that the HIV/AIDS pandemic has an impact on labour supply, through increased mortality and morbidity. It adds that this is compounded by loss of skills in key sectors of the labour market.
period of illness associated with AIDS reduces labour productivity. One review
reported that the annual costs associated with sickness and reduced productivity
as a result of HIV/AIDS ranged from $17 per employee in a Kenyan car manufacturing
firm to $300 in the Ugandan Railway Corporation (Bollinger L, Stover J. The economic impact of AIDS. Glastonbury, CT:
Futures Group International, 1999.)
increase of 3.27 million people with HIV between 2002 and 2018 in South Africa suggests
that an urgent action towards prevention and treatment programmes and economic
measures such as targeted training in skills needed in key industries is
Born 1993 January 12, in Pretoria, South Africa. Mduduzi Mbiza is a writer, speaker, researcher, consultant, philosopher and author of the book, ‘Human Education: The Voyage Of Discovery’. He has contributed his articles on education to Daily Maverick, The South African, Voice360 and EduOne.
In 2017 he published his statistical research paper on education titled, ‘Education in Economic Development: South Africa’.
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