East African Business Week (Kampala)

East Africa: Aids Slowing Economic Growth

By Mark Muhumuza, 29 April 2011

Kampala — The Ministry Of Health predicts that with the current trend of HIV/AIDS infections the economy will be 39% smaller by 2025. Uganda currently has an average prevalence rate of 6.2% with atleast 135,000 new infections annually.

The effect on the economy stems from the fact that the most affected are the productive youth who are supposed to engage in income generating activities but who are rendered unproductive because of AIDS.

Uganda which had been hailed by the world for its fight against AIDS, has since 2007 recorded new infection figures rise.

The current GDP projection for 2010 according to AIG Investments is expected to be 6.5% but according to the Ministry Of Health, this number will come down to atleast 5.3% due to AIDS.

However, according to AIG investments AIDS is not indicated in the potential factors that affect the GDP and economic growth to fall.

"The government subsidises ARVs, condoms and also spends money on running preventive campaigns and this would increase government expenditure on health," Dr Oleke adds.

The government is advocating for the increased use of condoms reversing the trend whereby emphasis was on abstinence. This is blamed for the rise in infections especially among married.

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