Although the HIV pandemic has been tamed medically through advances in antiretroviral therapies, the full economic costs of keeping people on treatment are still not fully quantified and risk escalating into a fiscal calamity. It is time for policy-makers to take action and fully invest in HIV interventions, recognising that doing so won’t prove an expense but will in fact raise labour supply, productivity, wages, consumption, and overall economic growth.
In this policy memo, authors Judith Kabajulizi and Mthuli Ncube, with the RethinkHIV consortium, draw on their recent research into the economy-wide impact of HIV/AIDS in Uganda to recommend increasing domestic direct taxes in countries where the disease is prevalent. They argue this should be considered as a source of additional health spending which can be put towards targeted treatment and prevention strategies. This will generate higher growth rates in labour supply to the economy, leading to faster growth in GDP.