The Scourge of Hiv/Aids Pandemic and Economic Performance: The Case Of Nigeria

Abstract

The early 1980s marked the beginning of a new devastating chapter in the global epidemic history when the first case of HIV/AIDS was reported in the United States. In Nigeria, the case of the disease was first reported in 1986, and since then the pandemic has continued to spread, moving from a concentrated epidemic to a generalized one, with its concomitant effects on the economic performance of the country. This study analyzed the impact of the scourge of HIV/AIDS menace on the macroeconomic outcomes in Nigeria. Engle Granger Two-Stage Estimation Procedure was used to determine the long-run relationship between real GDP and the explanatory variables, which included HIV/AIDS. The time series data utilized covered the period 1990 to 2010. Two models were estimated. The first model made use of HIV prevalence while the second model adopted the log of number of persons living with HIV/AIDS in Nigeria. Having found that the variables were cointegrated, OLS estimations were conducted on both models. The result of model one showed that HIV prevalence has negative but statistically insignificant impact on real GDP. Model two's result revealed that HIV/AIDS has negative and statistically significant impact on the growth of the economy of Nigeria in the long-run. A 100 percent increase in the number of persons living with the pandemic led to a 19 percent reduction in the level of real GDP. The adjusted R2 of 97 percent demonstrated a good fit and a strong explanatory power of the model. The conclusion drawn from the study based on the result of model two was that HIV/AIDS has significant and negative impact on the economic growth of Nigeria. The implication of this is that the macroeconomic impact of the disease in Nigeria will be noticeable and significant as the disease progresses. Therefore, substantial and sincere efforts should be geared towards combating it to avert its negative consequences on the growth of the nation's economy, mortality and morbidity rates, average life expectance, heath status of the population, level of poverty as well as development. In addition, the attainment of the millennium development goals (MGDs) in the country may remain a mirage if the spread of the disease is not halted.