Resource Logo
New York Times

AIDS Stalking Africa's Struggling Economies




 

At one time, Barclays Bank here was losing 36 of its 1,600 employees a year, 10 times the death rate at most American companies.

At the private Minbank Clinic, where the senior managers of Zambia's biggest mining houses, banks and industrial companies are treated, about half of all appointments are AIDS-related.

In nearby Zimbabwe, a personnel officer confesses that he has hired three people for each semiskilled job, expecting two to die in training. Half the executives at another company refuse promotions because an H.I.V. test is required.

In the mines, where one sick driller can cripple a whole crew, some South African shafts are reporting 25 percent H.I.V. infection rates, and even higher rates of tuberculosis, which blooms in weakened immune systems.

As the AIDS epidemic sweeps the continent, the underpinnings of many already shaky economies are becoming riddled with cracks. As one economist put it, the problems right now are merely insidious, "but one day you'll wake up and they'll be catastrophic."

In Africa, the disease attacks educated urban professionals -- the backbone of economic expansion -- first. The loss of those people can rob the continent of much of its potential. The damage is immeasurable, economists say, because it appears in ways that cannot be seen -- businesses that will never be founded, ideas that will never be pitched, university departments that will never be created.

In eastern and southern Africa, where the epidemic is worst, the economically strongest countries -- South Africa, Botswana, Zimbabwe, Kenya, Uganda and Zambia -- have infection rates between 10 and 25 percent. Virtually all of those infected will die within 10 years. West Africa's strongest economies, like those of Nigeria, Ghana and the Ivory Coast, have lower, but still scary, infection rates.

AIDS here, spread mostly by heterosexual encounters, hits the economically productive hardest. "It's men who may come from poor areas, but now have social mobility, can travel, can afford prostitutes," said Wayne Myslik, chief consultant for Lifeworks, a South African AIDS-management consultancy, who has studied the problem at companies all over Africa.

A well-known 1987 study in Rwanda showed that a pregnant woman had a 9 percent chance of infection if her husband was a farmer, a 22 percent chance if he was a soldier, a 32 percent chance if he was a white-collar worker and a 38 percent chance if he was a Government official.

Companies and governments may find ways to avoid bankruptcy, but the choices they make to survive will be cruel -- laying off the sick, sending others home to die. For Westerners used to a system in which insurers and governments pay for top-quality medical care, it is hard to grasp the kinds of cuts already being made here. Never mind $15,000 AIDS cocktails and costly cures for rare brain infections. Companies that once calmly paid for coffins, hearses and funeral meals for employees are now begrudging even that.

Accurately gauging the impact of the epidemic is difficult. Few companies know how many of their workers are infected. And no one admits having AIDS, so experts must guess how many of the deaths of young working people due to tuberculosis, malaria and vague complaints like "bad chest" are really AIDS-related.

But the indications are that the disease is devastating to family finances, widely variable in the damage it inflicts on individual companies and government health budgets, and -- so far, anyway -- surprisingly minor in its statistical effects on national economies. Because so many industries in Africa rely on cheap unskilled labor from the almost limitless pools of the unemployed, damage to overall economies may be relatively slight, economists said.

In one of the cruel ironies of epidemiology, the survivors may benefit economically, just as the survivors of the 14th century bubonic plague did in Europe when wages skyrocketed and farmland became free.

The damage at the family level is easy to grasp. The typical breadwinner in Africa has 10 dependents, and outside South Africa, there are no welfare systems. Poor families are devastated even by a child's death, because the cost of medicine and a funeral means they often have to eat less, sell land or cattle or take healthy children out of school. That returns a once-ambitious family directly into the hopeless cycle of poverty at its nadir -- illiterate, ill-nourished children hoeing small plots of corn to avoid starvation.

Health Systems

Strained Budgets Bring Rationing

The next greatest threat is to medical budgets, both public and private.

Most African countries have annual health budgets of less than $6 per citizen. Zimbabwe, for example, allocated $3.68 per person in 1995, while the hospitalization of a privately insured AIDS patient that year cost $18,000.

Faced with bankruptcy, governments respond by rationing.

The $15,000-a-year protease inhibitor "cocktails" that prolong so many American lives are out of the question -- the World Bank estimates that one patient's dosage would keep 400 children in school for a year. Most patients get the most common malaria and TB drugs and antibiotics. When their immune systems are so weak that those stop working, they simply die.

Even relatively rich South Africa says it cannot afford to offer $80 courses of AZT routinely to pregnant and nursing mothers to prevent transmission to their children.

Workers for corporations face similar rationing, but the more generous employers buy them more months of life. Worker health insurance is rare; far more common are clinics on the grounds of the mine, factory or farm. They offer as much as the company decides it can afford.

Small companies cope by simply dismissing sick workers; rich ones cap their health benefits. Even Eskom, the South African power company known for its generous benefits, recently cut its medical benefits for H.I.V.-infected employees from $18,000 a year to $2,600.

"The employees didn't scream," said Liz Thebe, Eskom's AIDS-education administrator. Since South Africa's press is unsophisticated about AIDS, protease inhibitor "cocktails" are seldom mentioned and few people are aware of them. Only a handful of Eskom workers, most of them white, take them, Ms. Thebe said. Others, who have heard that such treatment involves 60 pills a day and harsh side effects, simply declined. Some "prefer to go to traditional healers," she said.

Insurance companies react to the disease's heavy toll by writing policies that require repeated blood tests. If a country outlaws such requirements, they stop doing business there.

In dirt-poor Malawi, Mr. Myslik said, there are only two insurers left: the state-owned National Insurance Company, which is insolvent, and Old Mutual, which insures only expatriate workers.

The Companies

Some Cut Costs, Others Stress Help

The third greatest economic damage done by AIDS is to corporate profits.

Few companies will talk about AIDS in their work force and some hide the problem even from their shareholders, so analyses of losses are relatively rare.

At Indeni, Zambia's only oil refinery, AIDS costs doubled from 1991 to 1993 and surpassed the company's meager profits the next year.

A study of the Botswana Diamond Valuing Company, whose 525 highly-trained sorters pick diamonds off conveyor belts full of mine gravel, estimated that AIDS cost it $237 per employee, or 6 percent of profits, in 1994. The Botswana Meat Commission, which slaughters the country's beef, its second-biggest export after diamonds, was losing $268 per employee, or 8 percent of profits. At Muhoroni Sugar, a huge sugar plantation in Kenya, costs in 1994 were only $49 per employee, but they were expected to double while the company kept losing money. (To keep this in perspective, one must remember how low wages are in Africa. A typical Muhoroni worker earned about $1,200 a year.)

AIDS bleeds profits from companies in many ways: medical and death expenses, funeral payments, the costs of recruiting and training new employees; work hours lost because employees are off sick.

Interestingly, in companies that keep statistics, more work-hours are lost to funeral attendance than to illness. Since most Africans are buried in their rural home villages, attending a relative's funeral means asking for up to a week off.

"In my tradition, I can have three or four mothers," said Mulenga Kapwepwe, an executive at Project Concern, an AIDS-monitoring group here, explaining that Africans consider aunts, uncles and cousins to be immediate family. "Before the epidemic, things were loose -- I could go bury anyone in my extended family. Now companies are tightening up."

And there are the potentially huge costs of accidents. "I had a guy collapse at the airport the other day," said an executive who spoke on condition his company not be named. "What if he'd been driving his truck and hit a 727?"

With brutally hard-nosed management, some companies contain costs. Although 20 to 25 of the 900 employees of Chilanga Cement die each year, the effect on the bottom line is "almost negligible," said Chief Executive Patrick R. Gorman. The disease does not even rate a mention in the annual report.

The Lusaka-area company, which owns Zambia's biggest cement plant, was sold by the Government to Britain's Commonwealth Development Corporation in 1994.

Most of its deaths are among laborers, who are easily replaced, and the company is laying men off anyway, Mr. Gorman said. "To put it callously, it's achieving what we want," he said. "Natural wastage is letting us reach our manning levels."

Absenteeism for funerals had increased 15-fold between 1992 and 1995, but "we've stamped on that," he added. A worker may leave only for the funeral of a wife, parent or child without losing the day's pay.

White-collar deaths are "surprisingly low," Mr. Gorman said, though he had to hire back a marketing director because the two successors he hired have both died.

At the company's on-site clinic, costs are "down to about $15 per head per annum," he said. "We draw the line at AZT and all these high-powered expensive drugs."

For each worker who died, the company used to pay for the coffin, hearse, buses for mourners, food for the funeral meal and a cash grant to the family. "When I first got here, I tried to do away with the whole thing and ended up in a three-month firefight with the union," Mr. Gorman said. Ultimately, they settled for a grant worth about $200.

At the other end of the spectrum in Zambia is Barclays Bank, the country's biggest. Its employees are overwhelmingly white-collar and high school or college graduates. With subsidiaries across Africa, Barclays is widely admired for its AIDS plans, of which Zambia's was the first.

The bank has never calculated exactly how much the disease costs it, said Bright Nyirenda, who started the program. But its startling wake-up call came in the late 1980's when it was legal to give blood tests to job applicants: 8 of the 10 interviewed in the small city of Kabwe proved H.I.V.-positive.

Meanwhile, inside the company's ranks, "young men ready for promotion were dying," said Sylvester G. Mubengwa, Mr. Nyirenda's successor as health and safety manager.

Between 1987 and 1992, the bank's annual mortality rate rose from 0.4 percent to 2.23 percent. In America, about 0.25 percent is typical. It has since leveled off a bit lower, with 85 percent of the deaths AIDS-related.

Making matters worse, many are middle managers. The typical death is after six years of service, and the bank lost 8 supervisory or managerial rank employees last year and 11 in 1996.

Others who have been hard-hit aere the secretaries to those men. "The managers travel a lot, and so are. . . exposed to temptation," said Mr. Nyirenda, straining to speak delicately. "Back at work, they prevail over their juniors, and get favors from them. With secretaries, it can turn out quite viciously." The bank has a sexual harassment policy, he said, but workers in impoverished Zambia are desperate to keep their jobs.

Because the bank pays relatively well, it can fill its depleted ranks by raiding other companies. Small firms cannot compete for executive talent.

Barclays does not merely offer health lectures and free condoms, as some companies do. "It's bank policy to show compassion," Mr. Mubengwa said, sitting under a poster of the Barclays eagle with a red AIDS ribbon on its wing. When an employee begins to show signs of sickness -- slackening concentration, growing absenteeism -- Mr. Mubengwa tries to work out a plan that eases the work burden, oversees medical care and suggests disability retirement. Employees are prodded to prolong their lives by living in healthy ways -- quitting smoking, taking vitamins, avoiding new infections.

However, as is frequently the case here, the employees often deny they are sick, refuse H.I.V. tests and try to work until they die. In a legacy of mining-based economies, African companies typically pay two to four times annual salary to the family of a worker who dies on the job, while disability retirements are pittances.

The Economies

Loss So Far Slight, But Potential Fades

Perhaps surprisingly enough, the least catastrophic damage from the epidemic is at the macroeconomic level. Most of the 610 million people in Africa south of the Sahara are subsistence farmers, herders or fishermen. Those with formal jobs are usually laborers, crop pickers or miners. Although they suffer and die, the economy marches on indifferently. There are so many desperate job-seekers that they are quickly replaced.

Mead Over, a World Bank economist, estimates that in Africa's 10 worst-hit countries, through the year 2025, the disease will reduce growth of gross domestic product per capita by only 0.3 percent. Although total G.D.P. goes down when the sick do not grow crops or produce goods, he explained, so many people die that those who are left own greater slices of the economic pie. And he is quick to point out that an 0.3 percent drop in growth is significant in countries struggling to grow even 1 percent a year.

Some economists almost apologetically compare AIDS in Africa to the 14th century's Black Death. That great scythe of bubonic plague killed nearly a third of Europe's people in three years, but from a cold-bloodedly financial point of view, the survivors did nicely. With labor scarce, wages climbed, and "a lot of people suddenly had a lot more land," Mr. Over said.

And, as Alan Whiteside, an economist at the University of Natal, noted, many African economies are shrinking, while governments are selling state enterprises and trimming public payrolls. "Being cynical about it," he said, "They think: 'if you're going to lose people anyway, do you mind how they go?' "

The impact of deaths in the civil service has yet to be calculated. Business in Africa is intertwined with government, which usually owns the telephone system and electric company. Infection rates in the civil service are high -- in South Africa, as many as one in seven are thought to be infected. In some countries, civil servants, who have job security, may legally be home sick for a year before being replaced.

That is a crisis in the making, said Mr. Whiteside. "You can't run a company without electricity," he said. "If the power company loses its technicians, you can't generate electricity."

Although most companies have been slow to respond, or are still in denial, a few prescient ones saw the problem coming.

That did not always help.

Jenny Rogers runs South Africa's best-known AIDS program for the Billiton aluminum company in the province of KwaZulu-Natal. It hands out condoms and brochures in every bathroom, gives health lectures and aggressively treats workers for venereal diseases, which increase the risk of H.I.V. infection. Mrs. Rogers even brought a whole museum exhibit on AIDS from Pretoria to Richards Bay, the little city around the smelters, and found friendly H.I.V.-infected guides to take 20,000 visitors through and talk to them about their fears of the disease.

In a way, she was lucky. AIDS came late to South Africa because anti-apartheid sanctions kept the borders closed -- though not airtight -- until 1990. She might have had time to head off the disease.

But, she said, "for years, the unions blocked it."

"There was a belief that the disease didn't exist because no one had seen it. And some feeling that it was a plot by the old Government or the United States to keep the black population down by getting people to use condoms. And there were objections that condoms aren't part of African culture. And there are traditional practices here that spread the disease -- such as when a man dies, his wives becomes his brother's property so the land isn't split up, and he is expected to sleep with them."

She slowly overcame a lot of that resistance, she said. Shop stewards now double as AIDS educators, and the company hands out so many condoms that at one point employees were taking an average of 6.2 per day each. "I think I'm supporting a lot of small entrepreneurs," she said, laughing.

Nonetheless, it may all be too late. The infection rate in surrounding KwaZulu-Natal is now 30 percent, higher even than in Zimbabwe or Botswana, Africa's worst-hit countries. Those deaths are yet to come.

Dead Zones

Later articles will report on other aspects of AIDS in Africa and other continents.



 


Copyright © 1998 -New York Times, Publisher. All rights reserved to New York Times company. All New York Times articles contained on the AEGiS web site are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of The New York Times Company. You may not alter or remove any trademark, copyright or other notice from copies of the content. However, you may download articles (one machine readable copy and one print copy per page) for your personal, noncommercial use only.

Information in this article was accurate in November 15, 1998. The state of the art may have changed since the publication date. This material is designed to support, not replace, the relationship that exists between you and your doctor. Always discuss treatment options with a doctor who specializes in treating HIV.