A Review on the Socio-Economic Impact of HIV-AIDS in Ethiopia

Bizualem Assefa


This paper reviewed socio-economic impacts of HIV/AIDS at household, agriculture, firms’ level, labor force and other economic sectors in Ethiopia. The direct costs of AIDS include expenditures for medical care, drugs, and funeral expenses and indirect costs include lost time due to illness, recruitment and training costs to replace workers, and care of orphans. The labor force allied impact of HIV is also more important as the loss of young adults in their most productive years will affect overall economic output of the country which in turn decline the proportional per-capita income growth and lead to fall in private consumption, investment, exports and government tax revenue. The macroeconomic impact of AIDS was found to be adverse on savings and thus capital formation and reducing capital-labor ratio. Furthermore, AIDS-related illnesses and deaths to employees also affect a firm by both increasing expenditures for health care costs, burial fees, training and recruitment of replaced employees and by reducing revenues because of absenteeism due to illness or attendance at funerals and time spent on training. AIDS affect the health sector as it increase number of peoples seeking services and as health care for AIDS patients is more expensive than for most other conditions. Besides, people who conduct mining, who work in water sector, and who operate transport services spend many days and nights away from their families leading to increased opportunities for commercial sex and suffering from HIV/AIDS. AIDS affects the education sector too. In general, HIV/AIDS has adverse impact in the economy; it is, therefore, justifiable to target HIV-impact mitigation programs and effective prevention and management strategies through which its impact is alleviated.

Keywords: HIV/AIDS, Economic impact, mortality, labour force, Agriculture, Macroeconomic

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