The economic Impact of HIV/AIDS in Uganda A Workshop on Economic Epidemiology, Makerere University 3 rd -5 th August 2009 Fred Matovu, Ph.D

Overview: HIV/AIDS in Uganda One of the hardest hit countries in SSA HIV/AIDS cases increased from 2 in 1982 to 2m HIV infections by 2000 HIV prevalence rates reduced from 19% 1990s to 6.4% by 2005 (against 5% target) Wide regional variations in prevalence rates: 8.5% in Central compared to 2.3% in west Nile

HIV/AIDS in Uganda cont. About 1.4m people living with HIV/AIDS Of whom are children below 15 years Over have died of AIDS Over 1.7 m children orphaned by AIDS Risk of M-T.C.T estimated at 15-25% in 2004 Impact of HIV/AIDS greatest at household level

Distribution of HIV prevalence HIV prevalence is high in urban (10%) than in rural areas (5.6%) Prevalence higher amongst working population Prevalence increases with education level Prevalence is higher in wealthier quintiles Prevalence is higher on women than men

Prevalence rates by Location, 2004/05 Prevalence is higher in urban areas and among women

HIV prevalence by Education, 2004/05

HIV Prevalence by work status

HIV Prevalence by Occupation

Adult HIV Prevalence by age, 2004/05 Age CohortMaleFemale

HIV Prevalence by Wealth quintiles

Impact of HIV/AIDS at household level Loss of available income as working adults fall ill or die or stop work to look after children and/or the ill Additional expenditure on health care and funeral costs (e.g. ARV cost per year per person -$500) Depletion of household assets to finance the health care Lower productivity - reduced availability of food. Decrease in school enrolment as children are forced to dedicate time to farm labour and/or care-giving

Impact of HIV/AIDS at household level Distorts family structure and gender roles – Increase in female-head, child-headed and grand parents-headed households Depletes the asset base households leading to inadequate resources for production - affecting household income and nutrition. Increases dependency ratio - of children orphaned by AIDS

Healthcare costs to total household consumption for HIV and no-HIV HIV-related costs increase health care costs from about 10% to 45% of household consumption

Impact at firm level Increased morbidity and death of skilled staff, Reduced staff performance and increased medical bills Depletes productive workforce leading to loss of knowledge and skills and slow adoption of technologies.

Loss of productive labor force 8.4% of labour force lost by 2025

Impact at macro-level Impacts on macroeconomic variables: GDP,average income,savings and investment, employment and wages Loss in GDP growth (over 1% points) Increase incidence and depth of poverty – 1% point increase in household poverty overall Reduction in savings and investment ratio

Macroeconomic Impact cont.. Decline in life expectancy – 55 years in 2010 with high ART compared to 57 years in the NO AIDS scenario Reduction in labor-force – 8.4% loss by 2025 Higher spending on health care – crowding out fiscal space for other sectors

Expenditure on HIV/AIDS programmes as %age of GDP HIV/AIDS Expenditure/GDP increased by 2.5% points between 2003/04 and 2008/09

Impact on macro-economy cont.. Exchange rate : Donor aid inflows affect exchange rates – export and investment competitiveness inflationary pressures

Challenges Inadequate supply of ARVs Increasing cases of discordant couples Heavy reliance on donor-funding A wide range interventions currently exist but coverage and sustainability issues remain critical

Summary Prevalence rate stagnating at 6.4% and feared to be increasing Prevalence vary by socio-demographic characteristics Economic and social impact higher at household level Serious deficit in coverage of ARVs Most Interventions are donor-funded: sustainability??