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Africa’s A — AIDS

What is the impact of AIDS on the development of Africa?

February 16, 2005

What is the impact of AIDS on the development of Africa?

It is quite possible that, in some African countries, the result might not simply be lower economic growth — but catastrophic collapse.

This is due to the massive destruction of human capital — and the economic marginalization of massive numbers of orphaned children. What makes this all the harder is that in African societies, family is all-important to survival.

Examples such as Uganda and Senegal show that with determination and political will, AIDS infection rates can be brought down — or kept low. Increasingly, private companies are getting into the act.

As a matter of fact, in many African countries, private companies are better equipped than government agencies to deliver social services in an efficient and cost-effective manner.

Combating AIDS also is in the self-interest of private companies. After all, they are the ones who have invested in developing the skills of their employees. Losing those precious skills and people has a negative effect on their bottom line.

All of that is why a number of large companies have set up programs for employees and their dependents.

The annual cost to a company of prevention may be $5 per employee. New infections can cost firms up to 10% of annual salaries.

But the story does not simply end there. One challenge companies face is what do you do in a very poor country with few public health resources, where a good AIDS prevention and treatment program run by a company will act as a magnet for the wider community who lack services?

Where do companies draw the boundaries of their health interventions?