2008 World AIDS Day-Interview with Thomas Hurley, AfDB Human Development Department Director at the AfDB

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"Lead – Empower – Deliver" is the slogan for this year’s commemoration marking the 20th anniversary of the World AIDS Day (WAD). Positive responses have been given to the epidemic since 1988, when it was established. However Africa still faces great challenges in this regard and the African Development Bank (AfDB) Group has been a partner of African governments in the fight against HIV/AIDS. "The HIV/AIDS epidemic has an obvious negative impact on welfare from increased mortality rates and reversed gains in life expectancy associated with the disease" – said Tomas Hurley in his interview.

Question: What is the impact of AIDS on Africa’s economic development?

Answer: HIV/AIDS remains, and will remain for the foreseeable future, an enormous economic, social, and human challenge to Sub-Saharan Africa. The impact of HIV on the attainment of the MDGs and the Human Development Index is greatest in this region. The impact of the epidemic on households, human capital, the private sector, and the public sector undermines efforts at alleviating poverty in the region. The countries with high HIV prevalence have all experienced significant decreases in life expectancy between 1990 and 2006, ranging from 8 to 25 years. The countries are faced with increased mortality caused by AIDS among the productive age groups (women aged 20-29 years and men aged 25-34 years).

The HIV/AIDS epidemic has an obvious negative impact on welfare from increased mortality rates and reversed gains in life expectancy associated with the disease. Households are directly affected through lost income and decreased labor supply as the health of household members, particularly breadwinners, deteriorates. Where women are the heads of households, often limited empowerment and restricted access to and control over resources, assets, and opportunity, compound the impact on the households. According to a World Bank study, in Western Kenya, access to antiretroviral therapy led to a 35 percent increase in weekly hours worked, illustrating the magnitude of the disease’s impact on productivity and the potential economic benefits of treatment provision. In addition, increased out-of-pocket expenditures on health care, funerals, and related costs deplete household savings, decrease consumption, and reduce investment opportunities, contributing to the persistence of poverty.

The epidemic depletes savings, reduces labor supply, increases the vulnerabilities of households to shocks, reduces productivity in the private and public sectors, and negatively affects public finances. Perhaps most worrisome are the significant negative economic impacts that will persist in the long run, as the epidemic leads to increases in the number of orphans and affects human capital accumulation.

HIV/AIDS puts enormous strains on public and private sector finances. HIV/AIDS leads to decreases in productivity and increased absenteeism and turnover (with associated costs) of the workforce. In particular, the disease generally affects workers in the most productive years of their lives. In addition, costs of medical and death-related benefits increase. Small and medium businesses as well as the informal sector are likely to suffer more because they lack the resources necessary to mitigate those costs. At the same time that the epidemic causes an increase in the demand for government services, it leads to reductions in public revenues as the tax base decreases and the negative effects of the epidemic on long-run output are felt. Furthermore, there are a number of indirect fiscal costs, including orphan support, gender-differentiated survivor needs, and pension scheme benefits related to the death of HIV-positive civil servants or eligible individuals, as well as increases in the dependency ratio.

Question: What has the AfDB been doing to support African Countries fight HIV/AIDS?

Answer: During the 1997-2006 period the Bank committed approximately US$ 224 million to fund interventions to fight HIV/AIDS. The Bank’s resource allocation for HIV/AIDS was mainly for health projects (51%) while 30% was for stand-alone projects such as support to strengthen national AIDS councils (NAC/CNLS) in a range of countries. 15% of the resources were allocated to regional HIV projects such as the HIV/AIDS support to countries around Lake Chad and the Indian Ocean islands.  Most of the projects supported by the Bank have strong elements of building health system strengthening, including the provision of technical assistance as well as the training of human resources and building and equipping physical infrastructure.

Question: What is the way forward for the Bank in terms of HIV/AIDS?

Answer: The Bank’s draft Medium-Term Strategy (2008-2012) aims at focusing on poverty reduction, primarily by supporting the drivers of stronger and more equitable growth, opportunity and economic integration; deliver clearly identified and demonstrably superior results across the full range of its activities and in the full range of its Regional Member Countries (RMCs); and focus more selectively on certain sectors, namely; on infrastructure, governance, private sector and higher education.

The Medium Term Strategy emphasizes that sustained progress on health-related MDGs, including HIV/AIDS, will be impossible without adequate investment. The Bank intends to remain directly engaged in the social sectors (health, education and social protection) by managing more effectively its existing portfolio and providing selective support in coordination with other partners.  The Bank will play a catalytic role in supporting RMCs to better access and utilise resources from existing vertical funds. Moreover, the Bank will better exploit opportunities to link human development (including HIV/AIDS) objectives with core operations in infrastructure, such as water and sanitation, and increasing access to energy and power.

Some of the priority areas for engagement in HIV/AIDS include:

  • Mainstreaming HIV/AIDS in the Bank’s selective operational focus;
  • Strengthening institutional and human capacity building for health systems, financial management, and procurement; and
  • Building partnership to form new alliances with key partners such as the World Bank, the Global Fund, UNAIDS and others in order to complement the Bank’s on-going and future support to its regional member countries.

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Name: Thomas Hurley Title: AfDB Human Development Department Director at the AfDB