Cost-benefit analysis of the Onchocerciasis Control Program (OCP)

Abstract

The Onchocerciasis Control Program (OCP) has been operating since 1974. The OCP was first operational in seven countries then expanded to eleven countries in the mid-1980s. The goal of the program is to eliminate onchocerciasis river blindness as a significant public health problem throughout a major sub-region of West Africa by controlling the blackfly which transmits the parasitic agent of disease. The OCP has become recognized as one of the most successful programs in the history of development assistance benefiting the rural population by improving their health and living environment and freeing previously oncho-ridden tracts of land for settlement and cultivation. This paper presents the results of a cost-benefit analysis of the OCP in terms of net present value (NPV) and economic rate of return (ERR). OCP costs are actual expenditures incurred during 1974-93 and projected expenditures for 1994-2002. The OCP is expected to close in 2002. The analysis evaluates OCPs net benefits in terms of NPV and ERR over the project horizons 1974-2002 and 1974-2012. OCP WHO and World Bank data project total expenditures to be US$556 million during 1974-2002 and US$571 million during 1974-2012 in 1987 constant dollars. The longer project horizon however is considered a more accurate representation of the net benefits accruing from OCP since the benefits gained due to control tend to accumulate in the later stage of the project cycle and are expected to continue for at least another ten years even if no further action is taken to maintain control. The NPV of labor and land-related benefits together assuming 85% labor participation and land utilization during 1974-2012 ranges US$3729 million to US$485 million in 1987 constant dollars at discount rates of 3% and 10% respectively. The estimated ERR under the same assumptions is on the order of 20%. The project horizon of 29 years yields an ERR of approximately 18%. This analysis confirms the considerable economic benefits of the program in addition to its major contribution toward alleviating poverty and misery in rural poor areas throughout a major sub-region of West Africa.