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BackgroundAlthough new data suggest that the on-site cost of antiretroviral therapy (ART) has greatly declined, the scarcity of available financing and the extent of unmet need argue that policies to sustain and expand ART coverage and effectiveness must exploit all available opportunities for improving ART efficiency.

Since its detection in the early 1980s, the Acquired Immune Deficiency Syndrome(AIDS) has become a worldwide epidemic that is spreading rapidly, albeit unevenly, across continents, countries, age groups and socio-economic classes. In addition to finding ways to mitigate the pain, social disruption, and human suffering that itinflicts in its wake, economists and policy makers have also been concerned with the potentially significant economic consequences of AIDS illnesses. How will the spread of the AIDS virus and the accompanying rise in adult mortality affect a country's economic performance? Will spending on AIDS absorb a large and growing portion of national saving thereby impeding capital formation and economic growth? These and related questions are of particular importance to decision makers in countries where domestic human and non-human resources are acutely scarce.

Because AIDS affects primarily the most productive age group and is fatal and widespread, it will have a larger impact on African development than other more common diseases. Infection rates are higher in urban than in rural areas, and studies suggest that they are highest among urban high-income, skilled men and their partners. Macroeconomic models show that the greater the infection rate among educated workers and the greater the propensity to finance medical care out of savings, the more detrimental is the impact of AIDS on the growth of per capita income. Regardless of the macroeconomic effect, most households and businesses directly affected by AIDS will be economically worse off, at least in the short run. It is not clear, however, what effect AIDS will have on poverty in Sub-Saharan Africa or on income inequality. Governments need to assess the potential economic impact of AIDS, implement cost-effective programs to mitigate the impact, and target prevention programs to the economic sectors most sensitive to HIV infection.