HIV/AIDS and South Africa’s Economic Security
Researchers and scholars have examined the long-run economic impact of the HIV/AIDS pandemic in a number of studies that
indicate the pandemic will have tremendous consequences for Africa (Barnett and Whiteside 2000; Cross and Whiteside 1993; Nevin
1998; Over 1992; Tbaijuka 1997; Topouzis 1998). South Africa’s current economic condition reflects these basic conclusions. Since
the transition from the apartheid government in 1994, South Africa’s general economic conditions have declined. Unemployment in
South Africa jumped dramatically between 1994-2000, with current unemployment hovering between twenty-five per cent and thirty
per cent. The unemployment problem has been compounded by a lack of incentive for domestic investment. Inflation in South
Africa’s economy is running at close to forty per cent annually, while the central bank has increased interest rates to between fourteen
and eighteen per cent in order to control the high levels of inflation. Annual economic growth has stagnated at under two per cent,
while per capita gross domestic product has declined in recent years. Current economic conditions paint a clear picture of an ailing
South African economy and the future impact of HIV may only exacerbate the problems.
For instance, in their macro-analysis of the epidemic’s projected impact on the South African economy, Arndt and Lewis argue
that AIDS will result in a GDP level in 2010 that is significantly lower than that of a ‘non-AIDS’ scenario. They also project that per
capita GDP will decline by 8 percent relative to the non-AIDS scenario. Using an alternate quantitative model, Quattek concurs that
the AIDS epidemic will exert a profound negative impact on South Africa’s national GDP:
In 2006-2010, constant price GDP in the AIDS scenario will be an annual 3.1% lower than in the no-AIDS baseline; in
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