The private sector and HIV/AIDS in Africa: taking stock of 6 years of applied research

Abstract

Until recently, little was known about the costs of the HIV/AIDS epidemic to businesses in Africa or about business responses to the epidemic. This paper synthesizes the results of a set of studies conducted between 1999 and 2006. Data for the studies included were drawn from human resource, financial, and medical records of 16 large companies and from 7 surveys of small, medium-sized, and large companies in South Africa, Uganda, Kenya, Zambia, Ethiopia, and Rwanda. Estimated workforce HIV prevalence ranged from 5 to 37%. The average cost per employee lost to AIDS varied from 0.5 to 5.6 times the average annual compensation of the employee affected. Labor cost increases were estimated at 0.6-10.8% but exceeded 3% at only two of 14 companies. Antiretroviral treatment at a cost of US$360/patient per year was found to have positive financial returns for most but not all companies. Managers of small and medium-sized enterprises (SME) reported low AIDS-related employee attrition, little concern about the impacts of AIDS, and relatively little interest in taking action. AIDS was estimated to increase the average operating costs of SME by less than 1%. For most companies, AIDS is causing a moderate increase in labor costs, with costs determined mainly by HIV prevalence, employee skill level, and employment policies. Treatment of HIV-positive employees is a good investment for many large companies. Small companies have less capacity to respond to workforce illness and little concern about it. Research on the effectiveness of workplace interventions is needed.