Effect of the Prevalence of HIV/AIDS and the Life Expectancy Rate on Economic Growth in SSA Countries: Difference GMM Approach

Abstract

The productivity of countries around the globe is adversely affected by the health-related problems of their labour force. This study examined the effect of the prevalence of human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) and life expectancy on the economic growth of 33 Sub-Saharan African (SSA) countries over a period of 11 years (2002-2012). The study employed a dynamic panel approach as opposed to the static traditional approach utilised in the literature. The dynamic approach became eminent because of the fact that HIV/AIDS is a dynamic variable as its prevalence today depends on the previous years. The result revealed that HIV/AIDS is negatively correlated with economic growth in the region, with a coefficient of 0.014, and significant at the 1% level. That is, a 10% increase in HIV/AIDS prevalence leads to a 0.14% decrease in the GDP of the region. Tackling HIV/AIDS is therefore imperative to the developing Sub-Saharan African region and all hands must be on deck to end the menace globally.