Aids in Africa: A Business/Economic Perspceitive and the Role of Epicenter

By Karen Michael and Kelvin Glen

The scale of the HIV/AIDS epidemic at the close of the twentieth century defied predictions made by even the most refined models a decade ago. UNAIDS and WHO now estimate that the number of people living with HIV or AIDS at the end of the year 2000 stands at 36.1 million. Africa is home to 70 percent of the adults and 80 percent of the children living with HIV in the world, and has buried three-quarters of the more than 20 million people worldwide who have died of AIDS since the epidemic began. As they reach the peak of the HIV epidemic, African countries are straining to cope with the horrific effects of disease and death that follow in the wake of the AIDS epidemic. In sub-Saharan Africa, an estimated 3.8 million adults and children became infected with HIV during the year 2000, bringing the total number of people living with HIV/AIDS at the end of 2000 to 25.3 million. Over the same period, millions of Africans infected in earlier years began experiencing ill-health, and 2.4 million people died of HIV-related illness. (See Table 1 (to right of this article))

In South Africa, the HIV epidemic escalated with alarming speed between 1990 and 1998. Sentinel surveys conducted on antenatal clinic attendees showed a steady increase from 0.73 percent prevalence in 1990 to 22.8 percent in 1998. The 1999 survey showed that women in there 20s continue to be the most severely affected age cohort. The 2024 years old group was found to have an HIV prevalence rate of 25.6 percent while the 2529 years old women rate was 26.4 percent. Similar findings were made in 1998. However, there seems to have been an upward shift in HIV prevalence in relation to age. In 1999 the age group 35 to 44 were found to have slightly higher HIV prevalence rates than the same group in the previous years. The province of KwaZulu-Natal remains the epicentre of the HIV epidemic with an antenatal HIV prevalence of 32.5 percent in 1998 and 1999.

HIV/AIDS in South Africa

The South African government estimates the number of individuals infected with HIV in South Africa by the end of 1999 as follows: women (1549 years) 2.2 million; men (1549 years) 1.9 million; and babies 94,608102,000. This adds up to an estimated 4.2 million South Africansapproximately 10 percent of the countrywho are infected with HIV. An even higher incidence rate is given by UNAIDS, which estimates that adult prevalence is almost 20 percent in South Africa. The prevalence of HIV/AIDS remains alarmingly high in all provinces and in most age groups.

Only 60 percent of the R109.7 million funding allocated in South Africa to fight against HIV/AIDS was spent in the 1999/2000 financial year. Such financial mismanagement in the face of the health crisis in South Africa is indicative of a wider systemic fracture within the public health system. One in every 22 children born in South Africa dies before its first birthday, and infant mortality is increasing due to HIV/AIDS. South Africas infant mortality rate is four times higher than that of countries with comparable economies. Forty-one percent of clinics countrywide have inadequate drug supplies for the treatment of TB. Only 48 percent of clinics in KwaZulu-Natal, which has the highest levels of HIV infection in the country, offer the HIV test.

Economic Impact of HIV/AIDS

Economists agree that HIV/AIDS has the potential to affect economic growth in a variety of ways. The two most prominent effects of AIDS at the workplace will be decreased productivity and increased costs. Increased absenteeism will be experienced because workers fall ill or take time off to care for their families or to attend funerals. Workers who fall ill will be less productive at work and less capable of carrying out physically demanding jobs. Companies will face increased costs due to payouts of benefits such as medical aid, group life insurance, death and funeral benefits and early retirement packages. Employees who die in service or retire on the grounds of ill health have to be replaced. In a situation where the supply of skilled labor is constrained, replacement staff may not be easy to source and will invariably require training. As skilled workers become scarce, wages may increase.

UNAIDS reports that in South Africa, the epidemic is projected to reduce the economic growth rate by 0.30.4 percent annually, resulting by the year 2010 in a gross domestic product (GDP), 17 percent lower than it would have been without AIDS and wiping $US 22 billion off the countrys economy. Even in diamond-rich Botswana, the country with the highest per capita GDP in Africa, in the next 10 years AIDS will slice 20 percent off the government budget, erode development gains, and bring about a 13 percent reduction in the income of the poorest households.

Some recent survey results show just how great the future impact of HIV is likely to be. In a South African sugar mill 26 percent of all workers were living with HIV. HIV rates were higher among unskilled workers than among managerial-level workers. Nine-tenths of those found to be HIV-positive were married, and they had an average of 67 dependants. An examination of the health records of HIV-positive workers retiring for reasons of ill-health in the 1990s suggested that these employees visited the clinic over 20 times and took an average of 17 days off work in the last two years before retiring. The lost productivity associated with this level of absenteeism, the clinic and hospital costs, and the training and pay for new workers to replace those who were sick cost the sugar mill an average of around R8,465 per sick worker. Because the number of workers currently infected with HIV far exceeds the number who have already left the workforce, it is expected that in just six years time the company will find itself paying out ten times as much for sick workers as it does now. These costs do not even take into account the likelihood that premiums on health insurance and life insurance for employees will rise dramatically in the near future.

Despite these, and other findings, the response of African corporations to prevent and manage the HIV/AIDS epidemic inside the workplace has been at best patchy and uncoordinated.

UNAIDS reports that scaling up the response to Africas epidemic is imperative and affordable. Setting achievable targets for coverage, countries would need at least $US 1.5 billion a year for prevention measures to reduce the HIV risk to their population, including to infants, young people, workers, and recipients of blood transfusions. For people with HIV and their families, the bill (excluding antiretroviral therapy) for palliative care for pain and discomfort, the treatment and prevention of opportunistic infections, and care for orphans would cost a further $US 1.5 billion annually.

Africa faces a triple challenge: to deliver quality healthcare to a large and growing population that is manifesting severe AIDS-related illness; to reduce the annual incidence of infection by enabling individuals to protect themselves, their families and communities; and to cope with the cumulative impact of over 25 million AIDS deaths on communities, on business, and on economic development.

Clearly, these challenges can only be met by a strategic alignment of private and public sector resources and competencies. In a country like South Africa, with a relatively strong and sophisticated corporate and public sector, a model for such an alignment is being developed.

What Is EPICENTRE?

Epicentre is a new, not-for-profit organization that hopes to provide effective AIDS crisis management in KwaZulu-Natal by applying business systems to channel funds and resources efficiently. The organization believes that private-sector apathy in South Africa is driven by many factors:

" Because corporations still view AIDS as a health/poverty problem, not a business problem, HIV/AIDS projects are typically relegated to corporate social investment programs or banished to underresourced company clinics.

" Most companies are still in state of denial about the magnitude of the problem. This denial is an outcome of a lack of national leadership on the issue, the relative lateness of HIV epidemic in South Africa, confusing messages and literature on the epidemic, nonstandard methods of cost analysis, and, until recently, a lack of clear legislation and policy on issues such as pre-employment testing and dismissal on the grounds of seropositivity.

" HIV/AIDS has been very much the preserve of consultants in South Africa, and the government has not made strides in demystifying the epidemic for the average businessman. This has contributed to a sense of hopelessness and impotence on the part of the private sector.

" The South African business environment is fraught with the hazards of economic downturn, mercurial exchange rates, and labor action. Since independence, business has had to cope with a battery of new labor legislation and the impact of trade liberalization: the impact of AIDS continues to be sidelined.

" Lastly, most corporations have felt sufficiently indemnified against the effects of HIV/AIDS through their benefits arrangements, which shifted the risks of pension and provident fund payouts to workers. There are also significant pools of surplus labor in a country that has 33 percent unemployment. However, businesses are not counting the costs of absenteeism, downtime, lost productivity, and retraining.

Furthermore a review of the literature on AIDS workplace programs reveals that many do not take into account the following factors:

" There are critical resource constraints in developing countries Much of the literature proposing AIDS workplace programs amounts to a wish list. The amount of time and resources required to implement a sustainable, comprehensive HIV/AIDS prevention and management program with the full buy-in of the CEO, line management, and the factory floor in terms of capacity, time, infrastructure, and technical know-how is not available to the average line-manager, shopfloor worker, or Union representative. Line managers, in particular, have critical productivity mandates to fulfil that cannot accommodate planning, implementing, monitoring and evaluating a comprehensive, longitudinal AIDS workplace program. Small businesses, in particular, are likely to adopt a defeatist attitude when confronted with AIDS workplace proposals.

" The average line manager is not a public health professional Much of the AIDS workplace literature is written by people with a profound understanding of the public health aspects of the HIV/AIDS epidemic and its massive social, economic, and demographic impacts. Unfortunately, these technical aspects of the epidemic have not been translated into a language and context that can be understood and appreciated by business. HIV/AIDS reporting in the business press in South Africa has been fanciful and unformed, if not wildly apocryphal, and has done little to promote or communicate best practice.

" The inability of the public health sector to cope with epidemic The biggest stumbling block to implementing effective private-sector coordination has been lack of leadership on the HIV/AIDS issue in South Africa. This has contributed significantly to a loss of business and investor confidence, and hesitation on the part of corporations to invest in the issue. KwaZulu-Natal, the most highly infected province, is currently experiencing a triple epidemic of HIV/AIDS, cholera, and TB, as well as sporadic outbreaks of malaria. The provinces AIDS Action Unit, which has an annual budget of R20 million, has failed to implement a single AIDS-related project in the first 10 months of its existence. KwaZulu-Natal largest public-sector hospital currently has 70 percent of its adult medical ward occupied by HIV-positive patients, and yet still has no protocols for treatment.

To address these factors, Epicentre will:

" Stimulate business interventions against HIV/AIDS by helping corporations implement standardised and effective HIV/AIDS workplace programs.

" Lobby and provide advocacy to strongly address government for the common benefit of corporations and their constituencies and to strategically align its workplace and corporate social investment programs with public-sector projects.

" Offer a single KZN AIDS workplace strategy by building on existing programs or initiating new community HIV/AIDS projects to ensure optimum alignment of programs to a common strategy and to avoid duplication of effort. Free program support and distribution of centralized corporate funding will be provided to assisted organizations, although Epicentre will not initiate independent projects.

" Provide a results-oriented view by collecting data on corporate-funded community projects and HIV/AIDS programs and consolidating this information for better strategic program management.

" Provide an outsource service to help organizations align their programs with a common KwaZulu-Natal strategy and ensure effective program implementation. Income from this service will be used by Epicentre to support the free services list above.

" Solicit funding from donations, fund raising events, local and international donors, and gifts in kind. Epicentre will maintain its operational cost at a maximum of 15 percent of funding income, distributing the balance to strategic HIV/AIDS and Social Development programs within KwaZulu-Natal.

By centrally managing corporate social investment funding and encouraging government/business partnerships managed by a neutral facilitator such as Epicentre, real returns on investments and positive gains in terms of health indicators could be demonstrated. A strategic alignment with government projects may even increase technical capacity in the public sector in the long term. Through the efforts of Epicentre and other similar organizations, AIDS crisis management within KwaZulu-Natal may finally achieve substantial and significant results.

Kelvin Glen has worked with the South African Red Cross Society as Disaster Management operations manager. Kelvin later translated his diverse talents into the successful development of Inkulumo Consulting, which worked with the 13th International AIDS Conference and Marine Conservation. Kelvin is currently Vice President of the South African Institute of Fundraising.