Impact of HIV/AIDS on Economic Growth and Development in Nigeria

Nana Hauwa Muhammad

Saint Louis University
School of Natural Sciences
Bonifacio St., Baguio City

Summary

One of the key elements for economic growth is a healthy manpower. It also requires other
stimulating factors such as strong capital formation, real investment, technical progress, and
discipline. However, high-level presence of factors like Human Immunodeficiency
Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS) in some countries has not only
slowed down their economic growth, but, even reversed it in some cases. The widespread and
rising HIV/AIDS is a problem that could be affecting the growth and development of the
Nigerian economy which, led to compounding poverty, low standard of living, low productivity,
increased unemployment, morbidity, and mortality rates and eventually hinder development
efforts. Consequently, with the alarming growth of the disease within the country, This study is a
concern with the possible impact of HIV/AIDS on economic growth and development in Nigeria
and the level to which different policies can modify them. The two major economic impacts are a
reduction in the labor supply and increased costs.
Introduction

In the early 80s since it was discovered that

HIV/AIDS had become a pandemic on a
global scale and it was no longer only a
health issue but a substantial threat to
economic growth and development,
imposing a heavy burden first on families,
then on communities and eventually national
economies. An estimate of 11 persons
became infected every minute representing
some 5,753 new infections every day or
more than 36.8 million for one year (WHO,
2016). Similarly, the Joint United Nations
Programme on HIV/AIDS (UNAIDS)
estimated that as at 2015, about 69.5 million
-87.6persons were HIV positive worldwide
and almost 26 million were workers between
15 and 49 years and of the 35M million.
This implies that the most productive age
group was mostly affected and this had
grave negative implications for families and
national economies.

Economic growth is essential key element in

economic development needed by all
Countries or nations to meet increasing
demands caused by increasing in population,
technological advancement and competition.
With the development of globalization every
nation strives to achieve and maintain
economic growth in order to hedge against
internal and external challenges and threats.
One of the key elements for economic
growth is a healthy manpower. It also
requires other stimulating factors such as
strong capital formation, real investment,
technical progress, and discipline. However,
high-level presence of factors like Human
Immunodeficiency Virus/Acquired Immune
Deficiency Syndrome (HIV/AIDS) in some
countries has not only slowed down their
economic growth, but, even reversed it in
some cases.
1

The World Health Report (2004), which

focuses on the challenges posed by
HIV/AIDS observes that in many countries,
with the increasing effects of the epidemics
could have catastrophic consequences for
long-term economic growth and seriously
damage the prospects for poverty reduction.

six geopolitical zones based on geopolitical

considerations namely: North East (NE),
North West (NW), North Central (NC),
South West (SW), South East (SE) and
South-South (SS). Each geopolitical zone is
distinct in character with its own unique
size, composition of population, ecology,
language, norms, settlement patterns,
economic opportunities, and historical
background.

UNAIDS (2004 and 2008) addressed the

macroeconomic impacts of HIV/AIDS in the
editions of the Report on the Global AIDS
Epidemic. Notes that the best available
evidence suggests that HIV is likely to
reduce economic growth in high-prevalence
countries by 0.5% to 1.5% over 1020 years
an impact that is notable but not catastrophic
AIDS has the potential to create severe
economic impacts in many African
countries. It is different from most other
diseases because it strikes people in the most
productive age groups and is almost 100
percent fatal. The effects will vary according
to the severity of the AIDS epidemic and the
structure of the national economies.

Nigeria, the most heavily populated country

in Africa with a population estimate of about
140 million in 2006 (NPC, 2007), is fast
acquisition its share of the HIV/AIDS
scourge. Nigeria has the highest prevalence
rate in West African Sub-region and the third
highest prevalence of any country in the
world with a five percent population
prevalence rate, that is, over 3.6 million
people (UNAIDS/WHO, 2004). The
widespread and rising HIV/AIDS is a
problem that could be affecting the growth
and development of the Nigerian economy
which, led to compounding poverty, low
standard of living, low productivity,
increased unemployment, morbidity, and
mortality rates and eventually hinder
development efforts. Consequently, with the
alarming growth of the disease within the
country, this study is a concern with the
possible impact of HIV/AIDS on economic
growth and development in Nigeria and the
level to which different policies can modify
them. The two major economic impacts are
a reduction in the labor supply and increased
costs.

A case study of Nigeria

Nigeria is a Sub-Saharan African country
located in latitudes 4 1' and 13 9' North
and longitudes 2 2' and 14 30' east of the
West Coast of Africa. The country with an
approximately 923,768 square kilometers
and 800km of coastline is bordered in the
North by the Niger Republic; in the East by
the Republic of Chad and Cameroun; in the
West by the Republic of Benin and in the
South by the Atlantic Ocean.
The country has 36 states and the Federal
Capital Territory (FCT) with the states
further divided into 774 Local Government
Areas (LGAs). The states are grouped into

Labor Supply
The loss of young adults in their most
productive years will negatively affect the
2

overall economic
economy.

productivity

of

the

Smith (1776) in his historical work "Weather

of nations classified economic growth as a
function of specialization through the
application of new technology as well as
international trade." Simon (1971), view
economic progress as a continued rise in a
country's capacity to supply the economic
needs of her population over a long period
resulting from the introduction of new
technology and innovation that it needed.
Gylfason (2004) in his explanation of
economic growth viewed a country's
economic growth in terms of efficiency
through technical change. He further
explained that efficiency allows us to
squeeze out more output from a given input,
and that is what economic growth entails.

If AIDs is more prevalent among the

economic elites, then the impact may be
much larger than the absolute number of
AIDs deaths indicated.
Costs
The direct costs of AIDs include
expenditures for medical care, drugs, and
funeral expenses.
Indirect costs include lost time due to
illness, recruitment and training costs to
replace workers, and care of orphans
If costs are financed out of savings, then the
reduction in investments could lead to
significant reduction in economic growth

The impact of the HIV/AIDs scourge will be

examined by taking each segment of the
Nigeria economy one after the other as will
be seen below because of the pounding
economic activates over time.

Objective of the study

To assess the impact of HIV/AIDS on
economic growth and development in
Nigerian specifically, the paper will try to
determine to what extent do changes in
HIV/AIDS prevalence rate brought about
changes in the rate of economic growth and
development. It will also look at the effects
of the epidemic on savings and standard of
living. And lastly, it will proffer, based on
the findings, policy recommendations to
appropriate authorities.

From the studies carried out by relevant

authorities on economic growth, it is a fact
that when the active labour which is
inadequate for any economy and or is being
lost due to death, there is likely to be
downturn of that country's growth and
development. This is because it is this
productive age group that is the main force
that keeps the progress of any economy and
ensure its meaningful growth and
development.

Literature Review
From time immemorial, the issue of
economic growth and development has
always been given desirable attention by
both private, public entities globally because
of its relevance in the determination of the
level of standard of living, the level of
employment as well as poverty eradication.

Also an increase in cases of HIV/AIDs will

mean an increase in medical expenses such
as drugs and times funeral expenses. This
means when cases of HIV/AIDs increases
more money will therefore be needed to buy
retroviral drugs and treatment for other
accompanying diseases. This will in return
reduces the take home pay of the HIV/AIDs
infected person and correspondingly reduce
his ability to save The high incidence of
HIV/AIDs on the economic growth of
Nigeria can also lead to loss of hours of
work of workers due to illness that most
often accompany cases of HIV/AIDs
infections. This is known as (indirect cost).
This form of cost silently impacts on the
growth and development of the Nigerian
economy within much notice. Muhammed
(2013.

Microeconomic Effect of HIV/AIDS

Maijamaa and Muhammed (2013) Groupes
the effect of HIV/AIDS into those associated
with rising morbidity and those associated
with rising mortality rates for particular age
cohorts, especially sexually active adults and
children infected at birth. They maintained
that the rise in morbidity would have two
immediate effects: a negative labor
productivity effect and a positive health care
expenditure effect.

Furthermore, recruitment and training cost

to replace workers who are too ill to go to
work and those lost to death are equally
silent economic costs that retard the growth
of and development of the Nigerian
economy though gradually but in reality
impact negatively on the economy.

These effects, in turn, may adjust savings

behavior as well as investment in education.
The negative labor productivity effect will
arise because sick or concerned workers are
less productive than healthy, happy workers.
The positive health care expenditure effect
refers to increased expenditures by
households and the public or private health
care system to assist HIV/AIDS patients and
their families in coping with their
deteriorating health. The continuing rise in
mortality rates caused by HIV/AIDS will
first lead to a negative population growth
rate effect because fertility rate may change
as more women adjust their child bearing
behavior due to rise in HIV/AIDS.
Maijama'a (2013).

Also, the care of orphans left behind by

deceased HIV/AIDs parents equally silent is
yet another extra cost to the economy. This
is because the parents on whose
responsibility it world have been to work
and care for this group of people (orphan)
have been lost to the dreaded HIV/AIDs
there by leaving them to the care and mercy
of relations and well-wishers who have to go
extra mile to source for means to cater for
these orphans feeding and other care. This
will in effect reduce their take home and
ability to save and hence ability to invest
4

which in the final analysis transfers to the

drawback of the economy. The case study of
the 25 household surveys of workers of the
Ashaka cement company, Nigeria in the year
1995-96 to ascertain the level of spread of
HIV/AIDs among the worker of the factory
is a good confirmation of almost all the
above submission. This is because, in spite
of the company's takeover of the medical
expenses of those HIV/AIDs infected staffs,
the survey revealed that the disease still
draws the resources of the families of staffs
that were infected Lori et. al (1999).

has serious adverse effect on the

productivity, farm income and standard of
living of the affected farm families.
Education of rural households on the danger
of HIV/AIDS and ways of preventing or
minimizing its spread is recommended by
the study.
The impact of the high incidence of
HIV/AIDs on the Nigeria economic growth
and development can also be determined by
examined effect of such impact on the labor
force of each segment of the Nigerian
economy. This is because labor is the most
directly touched by all the stimulating forces
of economic growth by the HIV/AIDs
scourge which correspondingly influences
the economic growth and development of
Nigeria.

Also, it was equally observed from the result

of the survey that those infected staff also
lost their source of livelihood which
consequently creates major economic
burden both for their families and the
Nigerian economy. In essence, the result of
the survey confirms the projection that
caring for the infected; his family members,
among other costs, will also have a
significant impact on the Nigeria economy.
Lori B. (2000).
In another study by Kambou et. al (1992)
they investigated the impact of AIDS in
Cameroon, applying an eleven-sector
computable general equilibrium (CGE)
model for the period 1986-1991. They
conclude that over the period, the loss of an
urban worker had seven times the negative
impact on production as would be the loss of
a rural worker and GDP growth rate was
reduced by 1.9 percent per year.

Simon D. et-al Lower domestic productivity

reduces exports, while imports of expensive
healthcare goods may increase. The decline
in export earnings will be severe if strategic
sectors of the economy are affected, such as
mining in South Africa. Consequently, the

Also, Daudu et-al. (2003) investigated the

effect of HIV/AIDS on Farm Families in
Makurdi L.G. using frequency distribution,
percentages, and Chi-square. They used
primary data, and conclude that HIV/AIDS
5

balance of payments (between export

earnings and import expenditure) will come
under pressure at the same time that
government budgets come under pressure.
This could cause defaults on debt
repayments and require economic assistance
from the international community.

Although there is not much proof to support

this assumption due to the improper
documentation of death resulting from
HIV/AIDs in the rural areas where
HIV/AIDs is believed to have a impact
where agriculture is most widely practiced.
However, three different surveys among 17
different states found an average of 8-10
cases per week in rural areas. In another
study of Gadar Tamburuwa, a village in
Kano State, found the prevalence rate there
to be 16 percent in 1997, compared to a
national average of about 4.5 percent in
1996. Thus the epidemic has certainly
reached the rural areas; given that about 65
percent of Nigerias population is rural, the
potential impact on agriculture is significant.
The current prevalence rate is estimated to
be between 8 and 10 percent.

HIV and AIDS estimates

(Nigeria/USAID 2015)
Number of people
living with HIV
Adults aged 15 to 49
prevalence rate
Adults aged 15 and
over living with HIV
Women aged 15 and
over living with HIV
Children aged 0 to 14
living with HIV
Deaths due to AIDS
Orphans due to AIDS
aged 0 to 17

Economic impact
Agriculture

3 500 000
[2 600 000 - 4 500 000]
3.1%
[2.1% - 3.6%]
3 200 000
[2 400 000 - 4 200 000]
1 900 000
[1 400 000 - 2 400 000]
260 000
[190 000 - 360 000]
180 000
[120 000 - 250 000]
1 800 000
[1 300 000 - 2 600 000]

of

HIV/AIDs

Job. N .N. and Jennifer C. N. (2015)

conducted a study on the impact of
HIV/AIDS infection on the socioeconomic
profiles of the farmers in Shiroro Local
Government Area of Niger State in Nigeria.
Five communities identified as areas with a
history of infection were selected for the
study the socioeconomic characteristics of
rural farm households, the HIV/AIDS status
of rural farm households and the labor input
of households in farm operations, also to
determine the income of rural farm
households and estimate the poverty level of
rural farm households. The result shows that
the farm enterprise is family based and the
predominant tenure system is by inheritance.
Also, 17% of the respondents and 18% of
the households were infected with the
disease although there likelihood that the
number is under-reported since another 28%

on

Agriculture stands as the largest employers

of labor in a report of Nigeria Labour force,
(2014) indicated, that Nigeria economy
engages about 45 percent of Nigerian's
population. This means that high incidence
of HIV/AIDs will have a negative impact on
the agricultural output of Nigeria. This will
come in the form of loss of labor, supply and
income of workers in the agriculture sector
of Nigeria economy. This will happen if
there is a loss of able or active workers at
the crucial period of planting and harvesting
because it this will significantly translate
into the reduction in the size of harvest and
hence a negative impact on the growth and
development of the Nigerian economy.
6

of the respondents were not too confident of

their status. There was 30% rise in medical
expenditure and 30% fall in annual income
of those suffering from the disease. The
various determinations were then compared
between the infected families and noninfected families

engage in survival strategies like selling

their farm and household assets; land and
property assets; commercial sex worker and
practice unprotected sex thereby increasing
the rate of infection Rugalema et-al., (2003).
Once a household member develops AIDS,
increased medical and other costs such as
transportation to and from health
facilities/services occur simultaneously with
reduced capacity to work creating a double
economic burden Lovelife, (2000).

The prevalence of HIV/AIDS in the rural

households poses a serious threat to the
supply of farm labor. HIV/AIDS is
characterized by a recurrent period of
sickness and loss of labor which eventually
erodes agricultural production, food security
nutritional balance (Louwenson and
Whiteside, 2001). A study of an impact of
HIV/AIDS on household families in the Free
State province of South Africa found that
household members spend 7.5hr/day to take
care of the infected Booysen, (2003).
Households with AIDS infected patients are
burdened with high costs of managing the
condition and adoption of coping
mechanism
including
reduction
of
consumption of basic needs including food
Pitayanon et-al.,( 1997). The long period of
absenteeism by an infected worker and the
losses in skills and experience when an
infected worker dies tends to shift
production to a younger but less experienced
workforce. This also shortens skills and
increases the cost of training.

In another study done by the Nigerian

Farmers Union (NFU) showed that the death
of a breadwinner due to AIDS would cut the
marketed output of maize in small scale
farming and communal areas by 61 percent.
Similar results were obtained for other crops
(see table at right). The fall in marketed
output results from losses of labor and
remittances and the need to spend scarce
resources on medical expenses.

Furthermore, Balyamujura et-al., (2000)

argued that intensive agriculture will be
severely impacted through the loss of
specialized labor especially for harvesting
and processing. Sub-Sahara Africa's 25 most
affected countries have lost 7m agricultural
workers from AIDS epidemic since 1985
and 16m more may die by 2020 (Brough,
2001, FAO, 2000). Therefore HIV/AIDS can
be a cause of food insecurity and also a
consequence of food insecurity. For example
during periods of food insecurity such as
drought, individuals may be forced to
7

illness and deaths of employees to a great

extent affected the cement firm by both
reducing their revenue as a result of
increased health care cost (increasing
expenditure), burial fees, recruitment and
training of new staff to replace the sick and
the dead from the cement company. In this
particular study, which lasted over a period
of 18month, most of the 25 household staff
on whom the study was carried on were
either hospitalized, sick at home or coming
to attend clinic from their home and were
also paid for the work they did not do still
the company (Asaka cement) continue to
foot the cost of lost hours of work and
equally fund the cost of burial expenses.
In a report Lori B et al., (1999) it was also
discovered in some other industries in
Nigeria
like
the
Shell
petroleum
development company for instance that the
company incurred an extra (financial burden
resulting from HIV/AIDs infection) cost
from her provision of health support and
counseling service to their HIV/AIDs
positive staff.

Reduction in Marketed
Output
Due
to
AIDS
Deaths in Nigeria
Crops
Reduction
in
Marketed Output
Maize 61%
Cotton 47%
Vegetables 49%
Groundnuts 37%
Cattle Owned 29%
Yam 49%
Coco 35%

Economic impacts of HIV/AIDs on Firms

Industries
HIV/AIDS might have a major impact on
some firms. HIV/AIDS-related illnesses and
deaths to employees affect a firm by both
increasing expenditures and reducing
revenues. Expenditures are increased for
health care costs, burial fees and training
and recruitment of replacement employees.
Lori B, John S, and Nwaorgu O. (1999)
Revenues may be decreased because of
absenteeism due to illness or attendance at
funerals and time spent on training. Labor
turnover can lead to a less experienced labor
force that is less productive.

On the health sector, the impact of the high

prevalence of HIV/AIDs of the economic
growth of development of Nigerian is visible
in the area of over stretching of the staff of
the health sectors as well as their facilities.
USAID (2001) observed that in the private
sector, firms face higher costs in training,
insurance, benefits, absenteeism, medical
costs, sick leave, funerals, and pensions. At
the same time, the average experience of
their labor force falls, reducing accumulated
knowledge within firms. The most seriously
affected businesses are those that are laborintensive, such as transport. Companies in

Factors Leading to Increased Expenditure

Health care costs
Burial fees
Training and recruitment
Labour turnover

The case study of a manufacturing industry

in Nigeria particularly Ashaka cement
company has proven that HIV/AIDs related
8

Africa have already felt the impact of AIDS

on their bottom line. One sugar estate in
Kenya quantified the cost of HIV infection
as 8,000 days of labor lost to illness in two
years, a 50 per cent drop in processed sugar
recovered from raw cane in four years, and a
tenfold increase in health costs. The
company estimated that more than threequarters of all illness was related to HIV
infection.

In Nigerian, the mining industry is a key

foreign exchange earner for the Nigerian
economy. The major activities of this
industry are done in sites far away from
cities and town which often requires the
staff workers of this companies to stay away
from their families this exposes the miners
to the mercy of commercial sex workers.
Many became infected with the HIV/AIDs
and spread that infection to their spouse and
the community. The death, especially of
some of these highly trained engineers,
could be catastrophic to mining as their
engineer may be hard to replace and hence
could lead to the closure of such firm.

Impact of HIV/AIDS on Transportation

Transportation in Nigeria as important as it
is to the Nigerian economy appears to be the
most vulnerable to HIV/AIDs. This is
because most of the operators spend much
of their time outside their families which
often get them involved in extramarital
affairs from where a sizeable number of
them get infected with HIV/AIDs disease.
This is trained professionals who cannot
easily be replaced in case of death overnight.
Building
and
maintaining
transport
infrastructure often involves sending teams
of men away from their families for
extended periods of time, increasing the
likelihood of multiple sexual partners. The
people who operate transport services (truck
drivers, train crews, sailors) spend many
days and nights away from their families. A
survey of bus and truck drivers in Cameroon
found that they spent an average of 14 days
away from home on each trip and that 68
percent had sex during the most recent trip
and 25 percent had sex every night they
were away. The consequence of this is that it
can lead to the collapse of the transport
industry which is an important segment of
the Nigerian economy.

In addition, as more mining workers die of

HIV/AIDS, businesses can have an increase
in costs in terms of death benefits. Larger
companies often offer death benefits to the
family of the deceased worker. With the
increase in HIV-related deaths companies
have increased a big increase in costs and
have had to find ways lessen the impact of
these benefit costs. Some companies have
lessened their financial contribution to the
funeral, and some have required that
funerals are only to take place on the
weekend, to minimize the amount of time
taken off of work. With such a high
infection rate in mine workers together with
the related incidence of illness and death
means that mines loose between 5% and
10% of their workforce each year.
Impact of HIV/AIDS on Education
The HIV/AIDs impact on the economic
growth and development of Nigeria extend
its fair share on the Nigerian educational
development in three ways. The first is the
supply of highly experienced teachers which

Impact of HIV/AIDS on Mining

9

will be reduced by the HIV/AIDs related

diseases and even death. Children may drop
out of school because they are needed at
home to take care of their sick parents and
relatives.
This may lead to the total
stoppage of their education in the event of
the inability of their sick parents to afford
the cost of funding their education or their
death. All these in the long run will be an
economic growth and development setback
for the Nigerian economy because all the
useful contributions that this class of people
would have made would be decreased by the
HIV/AIDs scourge. David S. (2013).

economic growth because even where their

replacement by young worker is easy, the
inexperience on the part of that new
employee will affect the workers
productivity and hence hinders the countrys
last economic growth and development.
In the situation where there is a shortage of
labor as a result of death due to HIV/AIDs,
and consequently, leads to higher wages,
there will be a corresponding increase in
higher domestic production cost. This higher
production cost will lead to a loss of
international competitiveness that is capable
of causing foreign exchanges shortages.

Macroeconomic Impact of HIV/AIDS

Furthermore lower government revenues

and reduces private savings as a result of
greater health care expenditures and loss in
workers income can impact negatively in the
form of a major drop in savings and capital
accumulation. This will translate into
slowing down of employment creation in the
formal sector.

It is relatively hard to fault the

macroeconomic effect of HIV/AIDs on the
economic growth and development of the
Nigerian economy because most studies
have unveiled that estimates are sensitive to
the assumption about how the HIV/AIDs
scourge affects savings and investment. In
this respect, only a few studies have been
able to incorporate the impact of HIV/AIDs
at the household and firm level In their
macroeconomicro projection while few
other studies on HIV/AID discovered a
relatively small impact especially when the
supply of labour force are in excess which
often leads to those workers receiving little
wages David S. (2013.

Still, a reduce workers productivity and

investment leads to fever jobs in the formal
sectors. As a result some workers will be
pushed from high paying jobs in the formal
sectors to lower paying jobs in the informal
sector.
Also, HIV/AIDS can also lead to low
domestic capital formation. This is because
the rate of savings by households,
businesses, and government undertakings
lead to poor capital formation. As demands
for both curative and preventive health care
rises as a result of HIV/AIDS-related
morbidity, more financial resources are
channeled to health care expenses. This will
lower the level of marginal propensity to
save, and the long-run effect is a reduction
in domestic capital formation. Invariably

However, in spite of these, there still exist

several
mechanisms
through
which
HIV/AIDs affect the macro economic
performance of the Nigerian economy.
HIV/AIDs-related death will directly reduce
the number of experienced, productive
workers that will be available for a rapid
10

there is an erosion of potency to save and

invest in economic activities (productive
ventures) due to the priority given to
HIV/AIDS epidemic treatment. The
situation hinders the capacity for future
economic growth.

improved health promote economic growth

or a vicious circle in which poor health
and poverty become mutually reinforcing. In
this case, a link can be drawn on how good
health could produce rapid economic growth
through the formation of robust human
capital made possible by the ability of
individuals to access good health facilities.
.
In addition, the influence of limited access
to health facilities as a result of poverty
(low-income level would produce low
human capital, and consequently, low level
of economic growth, The G-8 at the
Okinawa summit in June 2004 planned
when they declare. Health is key to
affluence; and good health contributes
directly to economic growth while poor
health drives a country into poverty.

It has been observed from the latest

surveillance report from the National
HIV/AIDS and sexually transmitted disease
control programme (NASCP) that about 20
percent of the current HIV/AIDs cases are
civil servants while 18 percent are
housewives
and
businessman,
with
11percent farmer and 8 percent students
leaving
government
sector
strongly
vulnerable to suffer when that 20 percent
start to die. Lastly, the overall impact of
Aids on the macro economy is small at first
but increase significantly over time.
In addition, HIV/AIDS has a considerable
impact on government finances as a result of
declining productivity and incomes of both
individuals,
public
and
private
organizations. This would lead to recurring
fiscal deficit with its attendant consequence
of high inflation and given the relationship
between inflation and growth, the real
outcome would decline while growth would
be compromised. In order words, it affects
macroeconomic stability and growth through
effects on labor supply leading directly to a
reduction in sectoral output in most
economic sectors.
Moreover, the nature of the relationship
between health and wealth has been in most
cases a dialectical one. However, they could
be intricately and unquestionably related
(Hammoudi and Sachs 1999). Thus, it could
be noted that depending on the overall
policy environment, the relationship
between the health and wealth could either
produce a virtuous circle in which

Impact on foreign direct investment (FDI)

FDI is important for economic development,
and that HIV/AIDS hinders FDI. The
thought that HIV/AIDS may have an
11

adverse effect on FDI is not doubtful, for the

simple reason that healthy workers are more
productive than sick workers. As a result,
one would expect the health status of
workers in host countries to have an impact
on FDI.

According to (UNAIDS, 2010), HIV is not

like other diseases, that the majority
vulnerable group to HIV infection are
working-age adults. Approximately 92
percent of the people infected with
HIV/AIDS are in the 15-49 age group
(UNAIDS, 2010).

In a global study conducted by The World

Economic Forum (WEF) in 2003, reviled
that about 33 percent of business leaders in
developing countries that participated in the
study reported that HIV/AIDS had .affected
their country's access to FDI in the past .five
years.

In addition, in many moderate and high

pandemic countries, the disease has led to a
significant reduction in the size of the labor
force, in particular, educated/skilled
workers. When human capital and physical
capital are paired, then a decrease in the
quality and quantity of human capital will
result in a decline in physical capital (Sala-iMartin, 2005).

This study is consistent with the WEF

survey data. Specifically, business leaders
were asked to rate the effect of HIV/AIDS,
malaria, and tuberculosis on their
businesses. And HIV/AIDS was always
regarded as a more serious threat to
businesses than either malaria or
tuberculosis.

Lastly, the disease results in a decline in

population, which in turn implies a
shrinking market for businesses. HIV/AIDS
results in increased costs to the employer
and decreased productivity through the loss
of skilled and experienced workers and
consequential recruitment and training of
new employees, through increased demand
on the.

The countries in which the firms operated

were categorized by HIV prevalence rates,
the level of development and also by
geographical region. In all the categories,
HIV/AIDS was considered a more serious
threat. For example, about 60 percent of
the .firms operating in Sub-Saharan Africa
reported that HIV/AIDS has a .serious
impact on their businesses. For .firms in
low-income countries, the numbers were 53
percent, 44 percent, and 35 percent for
HIV/AIDS, malaria, and tuberculosis,
respectively; and for firms in middle-income
countries, the numbers were 15 percent, 5
percent and 8 percent, for HIV/AIDS,
malaria and tuberculosis, respectively.

12

Budgetary allocation of fund for the

Control and Treatment of HIV/AIDS
There has been an increasing need for the
mobilization of resources to curb the ever
increasing spread and the astronomical
increase in the number of infected cases of
HIV/AIDs since its discovery in 1985.
However, the funding and treatment of this
dreadful disease have been mainly from
direct government intervention as well as
donor agencies and philanthropic donations.
Some watchers are of the view that more
than half of the funding for the control of
HIV/AIDs in Nigeria comes from the donor
agencies and philanthropic organization. It is
also on record that the recent years of
economic hardship in Nigerian has also
witnessed a recession in this control of
HIV/AIDs in Nigeria especially 2014 and
2015.
Worse still, competing for funding demand
such as the Boko Haram menace in Nigeria
which has created a lot of humanitarian
cases and emergencies of a large number of
the Nigerian population has contributed in
no small way to this problem of in adequate
funding. To this end, the ongoing fiscal
recession currently in Nigeria indirectly
combined to the reduction in the fund made
available on the part the government of the
Nigeria for such program (control of
HIV/AIDs) for instance it was reported in
the punch newspapers that Nigerian
National Assembly Reduced the budget
proposal sent by the national agency for the
control of AIDs in Nigeria (NACA) from 18
billion naira to mere 1.6 billion naira. This
funding gap will in no time create a gap
which may threaten the backward drawback
of the government efforts.
Similarly, the news of the with drawal of the
government of the USA, global fund and
13

other donors agencies from funding

HIV/AIDs in Nigeria will to an extent
deprive the nation of the benefit of the
enormous fund from such foreign funding of
the HIV/AIDs program.

inequality and increased poverty in the

country. Therefore, HIV/AIDS have over the
years, been compromising Nigerias micro
and macroeconomic performance.
In all, it points to the urgent concern to halt
the continued rise and spread of HIV/AIDs
in the country failure of which may spell an
economic doom for the Nigerian economic
growth and development.

Total gross domestic product of Nigeria

(GDP)
The gross domestic product is the annual
growth rate that measures the changes in the
values of the goods and service produced by
a country's economy during the period of a
year. The gross domestic product (GDP)
therefore stands as the primary indicator that
rates the health or otherwise of any country.
This is because it represents the dollar
values of all the goods and services
produced over a specific time under review
(period).
The Nigeria gross domestic product stands
at a record low of 4.20 billion in 1960 and
rises to an all-time high of 568.51m billion
us dollar in 2014 and came down to 481.07
billion dollars in 2015. It is how ever on
record that the Nigerian gross domestic
product (GDP) has an annual growth rate of
4.07 percent from 1982 to 1916.

Recommendation and suggestion on the

way out
From the above Study, the spread of
HIV/AIDs has been confirmed to be
widespread even faster than the growth of
Nigerian gross domestic product. The
implication on the Nigerian economic
growth development is catastrophic. This is
due to the fact that, the greater the increase
in growth and spread of
HIV/AIDs
prevalence, the lower the levels of the
country economic growth becomes and this
will definitely translate into a reduction in
the real GDP growth and will hence affect
the performance of the economy in general .
This is confirmed by the finding of Kambou
et al. (1992) and World Bank report of
(2000, 2001) as well as Tsauni (2004) which
shares the belief that government health
expenditures had never contributed to GDP
growth.

Conclusion
There is no doubt that HIV/AIDS is a reality
in Nigeria and its widespread and existence
as well as magnitudes pose a clear threat to
the countrys economic growth and
development of the Country. In this regard,
HIV/AIDs has affected and alter both the
micro and macroeconomic stability of
Nigerian through low productivity in
production caused by sickness. Notably, this
will result in massive losses of man and
machine hours, reduced savings from the
increase of expenditure on health care, high
level of dependency ratio and increased in
public expenditure.
Beyond its effects on GDP growth,
HIV/AIDS
has
exacerbated
income

The punitive laws of 2014 antihomosexuality bill damages progress14years

imprisonment
Additionally, encouraging HIV testing
among the Nigerian population to ensure
everyone knows their HIV status is key to
any informed strategic plan. Without
knowing the extent of how many people are
living with HIV, it is hard to mitigate new
infections and provide HIV treatment to all.
14

The country needs concerted efforts of

government, NGOs and possible foreign
support to be able to combat the disease.
This could best be achieved through
sustained subsidy of drugs by the
government and international agencies
.Azuh, D. & Osabuohien, E. S. C, (2014).
HIV/AIDS education in Nigerian schools as
currently obtained is not adequate and
effective for controlling the disease. Inservice orientation courses, seminars, and
workshops should be organized for teachers
and students to further strengthen
HIV/AIDS education in schools at all levels.
Finally, the National Orientation Agency
(NOA) should in addition to NACA be
empowered /mobilized to embark on media
campaigns and public awareness program
about the disease. Knowledge they say is
power and in this case one required for
proper decision making and corresponding
attitudinal change and value reorientation
for stemming the prevalent rate of
HIV/AIDS in our society.

15

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