The macroeconomic impact of HIV / AIDS in Botswana.

In Botswana HIV/AIDS infection rates are extremely high and are increasing. Sentinel surveys of pregnant women show prevalence rates of 40-50% in some sites of the country. This article summarizes results from a study of the impact of HIV/AIDS on macroeconomic indicators in Botswana. The study used a simulation model to project the growth path of the Botswana economy over a 25-year period (1996-2021) under "with-AIDS" and "no-AIDS" scenarios. Findings revealed that the impacts of HIV/AIDS on macroeconomic variables are operated through the supply of labor economic growth per capita incomes savings and investment. HIV/AIDS decreased investment as households diverted money into care; there were labor shortages especially of skilled workers; there were labor impacts that could mean increased capital intensification; and government budgets were adversely affected with decreased revenue and increased demand for expenditure. These results suggest that key areas of focus need to be skilled labor investment and productivity growth. Moreover policy efforts should be devoted towards maintaining the investment rate especially for the private sector.