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Role of Fiscal Policy in Tackling the HIV/AIDS Epidemic in Southern Africa

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Abstract

Three countries in southern Africa have the highest adult HIV prevalence in the world: Swaziland (25.9 per cent), Botswana (24.8 per cent), and Lesotho (23.6 per cent). Fiscal policy is crucial for addressing this HIV/AIDS crisis. Utilizing a calibrated model, this paper investigates the impact of fiscal policy on reducing the HIV/AIDS incidence rates in these countries. In particular, we studied the welfare impact of different taxation and debt paths in these countries in reducing the HIV/AIDS prevalence rates. This is particularly important given the current concerns about dwindling foreign aid (especially the global AIDS fund), and the fiscal deterioration and sustainability in these countries. Our results show that, acting optimally has not only a positive societal welfare effect but also positive fiscal effects. For example, it will alleviate the debt burden by 5 per cent, 1 per cent and 13 per cent of the GDP, respectively for Botswana, Lesotho and Swaziland by the year 2020. Thus, at a time of fiscal crisis in developed countries and dwindling international HIV/AIDS resources, the future of effective and efficient HIV/AIDS intervention in Africa is clearly domestic.

Suggested Citation

  • John Anyanwu & Yaovi Gassesse Siliadin & Ejikeme Okonkwo, 2013. "Role of Fiscal Policy in Tackling the HIV/AIDS Epidemic in Southern Africa," African Development Review, African Development Bank, vol. 25(3), pages 256-275.
    • Handle: RePEc:adb:adbadr:2072
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    Cited by:

    1. Kabajulizi, Judith & Ncube, Mthuli, 2017. "Financing HIV/AIDS responses in Africa: Impact evidence from Uganda," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 843-860.
    2. Donald Kemajou Njatang, 2021. "Impact économique de la COVID‐19 au Cameroun: Les résultats du modèle SIR‐macro," African Development Review, African Development Bank, vol. 33(S1), pages 126-138, April.
    3. Ibrahim Kasirye, 2016. "HIV/AIDS Sero-prevalence and Socio-economic Status: Evidence from Uganda," African Development Review, African Development Bank, vol. 28(3), pages 304-318, September.
    4. Abdelhamid Moustabchir & Hicham Ouakil, 2023. "Vaccination, treatment and containment policy to reduce the effects of the COVID‐19 pandemic in Morocco," African Development Review, African Development Bank, vol. 35(4), pages 351-364, December.
    5. Hanan Morsy & Lacina Balma & Adamon N. Mukasa, 2021. "‘Not a good time’: Assessing the economic impact of COVID‐19 in Africa using a macro‐micro simulation approach," African Development Review, African Development Bank, vol. 33(S1), pages 17-30, April.
    6. Judith Kabajulizi & Judith Kabajulizi & Mthuli Ncube, 2015. "The economy wide impact of HIV/AIDS and the funding dilemma in Africa: Evidence from a dynamic life cycle horizon," EcoMod2015 8563, EcoMod.

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