Impact of HIV/AIDS Burden on Economic Growth in Selected Sub-Saharan Africa (SSA) Countries: Evidence from a Dynamic System GMM Estimates

HIV/AIDS is seen as not only the leading cause of death in SSA region but a major public health
challenge. Currently, 13% of total population workforce in the region lives with the epidemic; the
above means that one in every ten adults in the region is HIV/AIDS positive. Regrettably so, there is a
link between the epidemic prevalence and poverty. As a result, the study empirically examined the
impact of HIV/AIDS burden on economic growth in selected Sub-Saharan Africa (SSA) countries:
Evidence from a dynamic system GMM estimates utilizing cross-country series of 18 countries in the
region for the period of 1986-2015. The choice of the selected 18 SSA countries was driven by factors
such as degree of prevalence of the epidemic, level of economic growth and regional affiliations
resulting in four major regional blocs: SADC, ECOWAS, CEMAC and COMESA. Expectedly, the
study employed a two-step dynamic Blundell-Bond system GMM panel estimation technique
alongside with the Diebold and Yilmaz (2012) index variance decomposition approach. This was done
to achieve conditional convergence in the growth equation and also to disaggregate the prevalence
shock due to the epidemic burden. Series such as output per capita, output per capita growth,
HIV/AIDS prevalence, public health expenditure, total investment, number of school enrollment are
amongst others used in the study. Several pre-and post-diagnostics were accordingly carried out
amongst which are Windmeijer (2005) finite sample correction for standard errors, stationarity test
while controlling for heterogeinety, endogeneity or omitted variable biases, Hansen J-statistic for
identification, Diff-in-Hansen test for validity of the additional moment restrictions, Breusch-Pagan
Lagrange multiplier (LM) and Hausman tests for acceptability of the RE model etc. The findings from
the study revealed that HIV/AIDS prevalence, not only have impacted negatively on human capital
development and output growth in the region but has also currently been transmitting burden amongst
member states thereby rendering the entire region vulnerable; particularly the low income countries. It
further found that prevalence rate and income level of a country determines the level of her
vulnerability to the epidemic burden in the region. The study therefore recommends that since
members of SADC sub-region with very high prevalence rates are seen as powerful vector of
contagion; therefore, a good understanding of cross-border epidemic burden spillovers on growth
within the region is essential for policy coordination in the areas of preventive measures (reducing
morbidity and mortality), improved capital inflow for inclusive growth ceteris paribus. Finally, it was
recommended that the region should drive growth process as a unit.