Why do Nigerian manufacturing firms take action on AIDS?

Objective: To identify differences between manufacturing firms in Nigeria that have undertaken HIV/AIDS prevention activities and those that have not as a step toward improving the targeting of HIV policies and interventions. Methods: A survey of a representative sample of registered manufacturing firms in Nigeria, stratified by location, workforce size, and industrial sector. The survey was administered to managers of 232 firms representing most major industrial areas and sectors in March-April 2001. Results: 45.3 percent of the firms’ managers received information about HIV/AIDS from a source outside the firm in 2000; 7.7 percent knew of an employee who was HIV-positive at the time of the survey; and 13.6 percent knew of an employee who had left the firm and/or died in service due to AIDS. Only 31.7 percent of firms took any action to prevent HIV among employees in 2000, and 23.9 percent had discussed the epidemic as a potential business concern. The best correlates of having taken action on HIV were knowledge of an HIV-positive employee or having lost an employee to AIDS (odds ratio [OR] 6.36, 95% confidence interval [CI]: 2.30, 17.57) and receiving information about the disease from an outside source (OR 7.83, 95% CI: 3.46, 17.69). Conclusions: Despite a nationwide HIV seroprevalence of 5.8 percent, as of 2001 most Nigerian manufacturing firm managers did not regard HIV/AIDS as a serious problem and had neither taken any action on it nor discussed it as a business issue. Providing managers with accurate, relevant information about the epidemic and practical prevention interventions might strengthen the business response to AIDS in countries like Nigeria.

Shifting the Burden of HIV/AIDS

As the economic burden of HIV/AIDS increases in sub-Saharan Africa, the allocation of the burden among levels and sectors of societies is changing. The private sector has greater scope than government, households, or NGOs to avoid the economic burden of AIDS, and a systematic shifting of the burden away from the private sector is underway. Common practices that shift the AIDS burden from businesses to households and government include pre-employment screening, reduced employee benefits, restructured employment contracts, outsourcing of less skilled jobs, selective retrenchments, and changes in production technologies. In South Africa, more than two thirds of large employers have reduced health care benefits or required larger contributions by employees. Most firms have replaced defined benefit retirement funds, which expose the firm to large annual costs but provide long-term support for families, with defined contribution funds, which eliminate firm risk but provide little to families of younger workers who die of AIDS. Contracting out of previously permanent jobs also shields firms from costs while leaving households and government to care for affected workers and their families. Many of these changes are responses to globalization and would have occurred in the absence of AIDS, but they are devastating for employees with HIV/AIDS. This paper argues that the shifting of the economic burden of AIDS is a predictable response by business to which a thoughtful public policy response is needed. Countries should make explicit decisions about each sector’s responsibilities if a socially desirable allocation is to be achieved.

The Private Sector and HIV/AIDS in Africa: Taking Stock of Six Years of Applied Research

Background: Until recently, little was known about the costs of the HIV/AIDS epidemic to businesses in Africa and business responses to the epidemic. This paper synthesizes the results of a set of studies conducted between 1999 and 2006 and draws conclusions about the role of the private sector in Africa’s response to AIDS. Methods: Detailed human resource, financial, and medical data were collected from 14 large private and parastatal companies in South Africa, Uganda, Kenya, Zambia, and Ethiopia. Surveys of small and medium-sized enterprises (SMEs) were conducted in South Africa, Kenya, and Zambia. Large companies’ responses or potential responses to the epidemic were investigated in South Africa, Uganda, Kenya, Zambia, and Rwanda. Results: Among the large companies, estimated workforce HIV prevalence ranged from 5%¬37%. The average cost per employee lost to AIDS varied from 0.5-5.6 times the average annual compensation of the employee affected. Labor cost increases as a result of AIDS were estimated at anywhere from 0.6%-10.8% but exceeded 3% at only 2 of 14 companies. Treatment of eligible employees with ART at a cost of $360/patient/year was shown to have positive financial returns for most but not all companies. Uptake of employer-provided testing and treatment services varied widely. Among SMEs, HIV prevalence in the workforce was estimated at 10%-26%. SME managers consistently reported low AIDS-related employee attrition, little concern about the impacts of AIDS on their companies, and relatively little interest in taking action, and fewer than half had ever discussed AIDS with their senior staff. AIDS was estimated to increase the average operating costs of small tourism companies in Zambia by less than 1%; labor cost increases in other sectors were probably smaller. Conclusions: Although there was wide variation among the firms studied, clear patterns emerged that will permit some prediction of impacts and responses in the future.