The Impact of Hiv and Aids on Gdp Per Capita in Sub-Saharan Africa

The Impact of HIV and AIDS on GDP per Capita in Sub-Saharan Africa

                                        Carolyne Gakio

                                             04/22/2016

Abstract

This paper examines the relationship between HIV and GDP per capita in Sub Saharan Africa. My hypothesis is that there will be a negative relationship between my dependent and independent variables. In this case, my dependent variable will be GDP per capita and independent variable will be number of persons living with HIV/AIDS between age 15-49. First, I created a simple regression model using data from2009 GDP per capita along with number of people living with HIV between ages 15-49. When the p-value of adults living with HIV proved to be insignificant, I added mode independent variables like Arable land in hectares, Labor supply, Exports as a percentage of GDP, imports as a percentage of GDP, number of deaths caused by AIDS and Foreign Direct Investment. The multiple regression variables showed that Imports, Arable land, number of deaths as a result of AIDS and labor supply are negatively correlated to GDP per capita

Introduction

HIV/AIDS being one of the most life threatening disease has the potential to create severe economic impact in Sub-Saharan Africa. It is known to strike people from all backgrounds especially in their productive years. According to a source, UNAIDS Gap Report, the first case of HIV/AIDS was reported 35 years ago. In 2009, 22.5 million people have been infected by HIV/AIDS with newly infected people amounting to 1.8 million and 1.3 million AIDS related deaths. Consensus in the international community has grown that HIV/AIDS poses a threat to development, security and economic growth. According to UNAIDS, the vast majority of people living with HIV are in Low-to Middle Income countries particularly Sub-Saharan Africa.

I conducted this research with the examination of the relationship between number of reported cases of HIV/AIDS and GDP per capita within the said country. I hypothesized and found that HIV/AIDS and GDP per capita are generally correlated in developing nations. I also hypothesized that there will be an inverse relationship between HIV/AIDS and GDP in Sub Saharan Africa

Literature Review

A number of articles and research exist pertaining to the impact of unemployment and household income on poverty levels. The following papers provide information on these relationships

The Impact of HIV and AIDS ON Africa’s Economic Development

In this 2002 article by the BMJ, they used economic theory to predict what happens to African economies which are faced by increasing cases of HIV/AIDS victims. Simon Dixon, Scott McDonald and Jennifer Roberts did their study of 41 countries in Africa between the periods 1960-1998, they reviewed empirical studies and have attempted to quantify the macroeconomic effects of this disease. They found studies by searching through online engines like Econlit, Pubmed, Science and social citations. They also contacted key researchers and did a secondary search of the bibliographies of all the studies they found. Economic theory predicts that HIV/AIDS reduces labor supply and labor productivity, it reduces exports and increases imports. HIV/AIDS pandemic has already reduced average national economic growth rates by 2-4% a year across Africa. Prevention and treatment programs and economic measures such as targeted training in skills needed in key industries will limit the economic effect of HIV/AIDS