HIV AIDS and Economic Growth in Ghana

Abstract

AIDS is a growing problem throughout the world and has become one o f the worst pandemics o f the 21st century. Africa is one o f the worst hit regions in the world, having seven countries with more than 15 percent o f the population infected. This study reports estimates o f the economic impact o f HIV/AIDS on economic growth in Ghana using the human capital approach o f the Augmented Soiow growth model. The model is estimated with health capital as an input. H1V/A1DS is assumed to influence the accumulation o f health capita] proxied by a life expectancy shortfall measure. The model is estimated empirically using time series data spanning the period 1980-2009. The statistical package used for the work is the E-view software. The result from the study shows that HIV/AIDS has an insignificant effect on the growth o f the Ghanaian economy. Additionally, human capital has a negative and significant impact on growth. This is expected as HIV/AIDS first impact on human capital first before impacting on growth. The impact on human capita] is seen through absenteeism o f worker on days that they should be at post leading to the lost o f the manpower ’and productivity. The study recommends that there is the need to take into consideration the macroeconomic effects o f any intervention to combat the disease. This will help assess which programmes in the country give the best value for money.