Discussion Paper No.43 of 2004 on Health and Growth in Africa

Abstract

The paper examines the relationship between health status and economic growth in Africa over the period 1960-2000. Between 1960 and 1970s, health status in many African countries expanded rapidly, slowed down in the 1980s, and declined in the mid-1990s. Except for the 1980-95 period, when health indicators in Africa improved as growth declined, their trend in other periods mimicked economic performance in the region. By the end of 1990s, health indicators for many African countries were approaching or already below the indicators for the 1970s. The slow-moving HIV/AIDS infection rate, which reached alarming proportions in the mid-1990s is the main factor responsible for the sharp decline in the health status of most African countries over the past decade. The effects of HIV/ AIDS were compounded by widespread poverty in the continent, occasioned by low or negative growth rates, starting in the 1980s. Surprisingly, measured growth burden of HIV/AIDS in Africa tends to be modest, even though the continent has the highest HIV/AIDS incidence in the world. Based on a review of admittedly limited microeconomic literature on the relationship between health and income, the paper concludes that accumulation of health human capital in Africa has been good for growth in the continent and the vice-versa. There is some evidence that in countries where growth occurred, it facilitated production and financing of better health, which in turn promoted growth. The paper further suggests that health human capital, which is intertwined with education human capital, is a key factor in explaining economic performance in Africa vis-a-vis other world regions, and in designing policies for attacking poverty in the continent.